Invest in pension funds, FDs, mutual funds? Check out the “Rule of 72” to know when your money will double | Personal finance news
New Delhi: You are considering investing in either a pension plan, term deposits (FD) or mutual funds and are worried about how long it will take to double your investment, then you have come to the right place.
In India, there are several investment options available which can double your investment in no time. However, some investment options are safer than others, while other safer options take a little longer to double your investment.
You can easily calculate the period of time it takes to double your money by simply following the “rule of 72”. The rule is actually quite simple and anyone can know the time frame it takes to double the investment in the blink of an eye.
What is the rule of 72?
The rule of 72 is just a very simple mathematical formula. All you need to do is divide the interest rate by 72 to find out how long it takes to double your investment. Also Read: IRCTC Package: Visit Mata Vaishno Devi In Budget With Indian Railways, Check Details
Here is the formula for the rule of 72:
Time needed to double the money = 72 / Interest rate offered by the plan
Here is an example :
If you invest Rs 1 lakh in the National Pension Scheme (NPS) and get an interest rate of 9%, here is how you can calculate the period of time it takes for your money to double:
Time period = 72/9 = 8 years.
So by now you should have clearly understood the process of calculating the time it takes to double your money. You can also use the same formula to calculate the time period for other investment programs. Also Read: Apple Introduces Special Offer for Indians! Now get 20% bonus on adding money to Apple ID