Power of Compounding: How long your Rs 15 lakh investment takes to double to Rs 30 lakh; know with this simple investment rule
Find how the Rule of 72 can help you estimate the time it takes for investments to double. Learn how Rs 15 lakh could grow to Rs 30 lakh using this simple formula.
The Rule of 72 is a straightforward tool to quickly estimate how long it takes for investments to double at a fixed annual return. By dividing 72 by the expected rate of return, investors can easily assess growth potential, helping guide financial decisions and long-term planning. Curious about how your Rs 15 lakh could become Rs 30 lakh? With an 8% return, the Rule of 72 offers a simple calculation to reveal the approximate timeframe for doubling your investment.
What is the Rule of 72?
Simple Formula: Helps estimate the time to double an investment with a fixed annual return.
Calculation
Just divide 72 by your rate of return for a quick approximation.
Key Uses of the Rule of 72
Investment Growth Prediction: Quickly gauge when your investment will double.
Easy Calculation
Great for assessing if you're on track with financial goals.
Approximate Estimate
Useful for practical purposes but not an exact value.
How the Rule of 72 Works
-
Purpose: Calculates the time needed to double an investment at a fixed rate.
-
Inflation Insight: Can also show how long it takes for inflation to reduce your money’s value by half.
Purpose: Calculates the time needed to double an investment at a fixed rate.
Inflation Insight: Can also show how long it takes for inflation to reduce your money’s value by half.
Formula Breakdown
Formula: T≈R72
- T = Time to double
- R = Interest rate (%)
Use Case: Estimate doubling time or inflation impact.
Benefits of the Rule of 72
-
Ease of Use: Fast and straightforward, especially for investors.
-
Versatility: Can apply to financial growth, population trends, etc.
-
Investment Planning: Helps in strategizing when to sell for a 2:1 return.
-
Risk Management: Allows for flexible adjustments based on estimated growth.
Ease of Use: Fast and straightforward, especially for investors.
Versatility: Can apply to financial growth, population trends, etc.
Investment Planning: Helps in strategizing when to sell for a 2:1 return.
Risk Management: Allows for flexible adjustments based on estimated growth.
How long it takes for your Rs 15 lakh to double to Rs 30 lakh?
It will take approximately 9 years for Rs 15 lakh to grow to Rs 30 lakh at an 8% annual interest rate.