1. How much time does it take to double your money?
• We all have heard that money makes money, but my dear friend –
Money does not grow by itself; you have to make it grow.
If you don’t make it grow, inflation will eat away your savings. So, it’s always better to act now rather than Curse later.
• Simple formula which will tell us How much time you need to double up your money.
(A) Rule of 72 = Simple Rule divide 72 by the Annual Interest Rate & this is the time it will take you to double up your money.
For ex: If you Invest,
Rs 10, 000/- at 8% per annum it will take “9 Years” (72/8) to double up our Money.
(B) Rule of 69.3 = This Rule is an approximation to compute the exact Time required to Double up Money, Divide 69 by the annual interest Rate & then add 0.35 to it.
For ex: If you Invest, Rs 10, 000/- at 8% per annum it will take “8.95 Years” (69/8+0.35) to double up our Money.
• If your money is in a Savings account earning 4% a year, it will take Eighteen years to double your money (72/4 = 18).
2. How much time to “Triple” your money?
Rule of 114 = Divide 114 by the Annual Interest Rate to Compute the time required to Triple your money.
For ex: If you Invest, Rs 10, 000/- at 8% per annum it will take “14.25 Years” (114/8) to Triple the Money.
In case, you don’t believe in Investing & only end up Saving, Inflation is surely going to show its Curses on us. Assuming 6% Inflation, the value of your Money will be left to half very soon based on Following Rule:
(A) Rule of 70 = Divide 70 by the Inflation Rate to Compute the time frame by which the value of your Money would be reduced to half.
For ex: If you have Rs 10,000/- & the inflation rate is 6%, the value of your money would be reduced to half in 70/6 = 11.66 Years
Now, the Choice is yours, either Investing up your money or reduces it to half.
