Rule of 144: In how many years, your Rs 5 lakh will turn into Rs 20 lakh; you can know through this simple rule
Understand how the Rule of 144 can help you calculate the time required for your Rs 5 lakh investment to grow into Rs 20 lakh, providing clarity on long-term financial planning.
The Rule of 144 is a simple formula used by investors to estimate how long it will take for an investment to quadruple. If you're wondering how many years it will take for your Rs 5 lakh to turn into Rs 20 lakh, this rule provides a quick and clear answer. By dividing 144 by your annual return rate, you can easily determine the number of years required for significant growth, helping you make informed decisions about your long-term financial goals and investment strategy.
Rule of 144
- Personal Financial Goals: You know your financial goals best, but mathematical rules can help with investment clarity.
- Rule of Thumb: Money managers and tax experts often refer to these as "rules of thumb" for better investment planning.
- Purpose: The Rule of 144 is one such rule, offering insights into how long it takes for investments to grow significantly.
What is the Rule of 144?
A simple formula to estimate how long an investment will take to quadruple.
Key Formula:
:Years to quadruple=Annual Return Rate (%)144
Quadrupling Rs 5 Lakh
Using this rule, you can estimate how many years it will take for Rs 5 lakh to turn into Rs 20 lakh.
In how many years, your Rs 5 lakh will turn into Rs 20 lakh
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Determine the Quadrupling Factor:
- To grow from Rs 5 lakh to Rs 20 lakh, your investment needs to quadruple (4 times).
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Use the Rule of 144 Formula:
Years to quadruple=Annual Return Rate (%)144
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Example Calculation:
- If your expected annual return is 8%:
Years=8144=18years
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Result:
- At an 8% annual return, it will take approximately 18 years for your Rs 5 lakh to grow to Rs 20 lakh.
Determine the Quadrupling Factor:
- To grow from Rs 5 lakh to Rs 20 lakh, your investment needs to quadruple (4 times).
Use the Rule of 144 Formula:
Years to quadruple=Annual Return Rate (%)144Example Calculation:
- If your expected annual return is 8%:
Result:
- At an 8% annual return, it will take approximately 18 years for your Rs 5 lakh to grow to Rs 20 lakh.
You can adjust the annual return rate to see how it affects the timeline. For example, at a 10% return:
Years=10144=14.4years
Patience is Key
These rules provide clarity and keep you motivated to stay patient as your investment grows over time.
