Financial Planning Tips : Everyone wants his money to double, triple or quadruple in his investments. But how to know which investment instruments will give how much return to invest in? There are some rules in the world of personal finance that will tell you this. These are the rules of 72, 114 and 144. These rules will tell you in how many days your money will double/triple/quadruple and you should invest in the investment option that gives how much return. Let's know.
Rule of 72
This rule tells you when your money doubles in an investment option. To understand the rule of 72, you have to divide the potential annual rate of return by 72. For example, you have invested Rs 1 lakh in an investment option that is giving 8 percent annual return. Now dividing 72 by 8 will give 9. This 9 is the number of years it will take for your investment to double. That is, in this investment, it will take 9 years for your Rs 1 lakh to become Rs 2 lakh.
Rule of 114
The rule of 114 tells you how much time it will take for your investment to triple. In this rule, you have to use 114 in place of 72. For example, if an investment is giving you 10 percent annual return, then it will take 114/10 = 11.4 years for your money to triple. In this way, it will take 11.4 years for your money to triple in this investment.
rule 144
Using the rule of 144, we can find out how much time it will take for our investment to quadruple. For this, you have to put 144 in place of 72 in the formula. For example, an investment is giving you 12 percent annual return. So, in this investment, it will take 144/12 = 12 years for your money to quadruple. You can also find out how much annual return will be required to quadruple your investment in so many years by using this formula in reverse.
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