What Is the Rule of 72? :- Whenever it comes to saving, the first thought that comes to our mind is how long will it take for our money to double. Accordingly, the amount of investment is decided, so that more funds can be added for marriage, children’s education and retirement.
There are many rules in economics with the help of which you can easily find out how much time will it take for your money to double at a certain interest rate. Today in this report we are going to talk about one such rule, Rule 72, with the help of which you can know in how much time your money will double.
What is Rule 72?
With the help of Rule 72, you can know in how much time money will double at a fixed interest rate. For this you will have to divide the interest rate that you are getting on the investment by 72. For example, you are getting 7 percent interest on FD in a bank. If you divide 72 by 7, the answer will be 10.28. That means at 7 percent interest your money will double in 10.28 years.
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Rule applies to quarter and half year
Along with annual, this rule also applies to quarterly and half yearly and according to this you can calculate in how many quarters and half yearly the money will double. For example, if you get 3 percent quarterly interest on a bond, then by applying Rule 72, your money will double in 72/3 = 24 quarters i.e. a total of 6 years. For example, if you are getting 12 percent half yearly interest on any bond, then your money will double in 72/12 i.e. 6 half years (3 years).
