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The Rule of 72*

The Rule of 72

The Rule of 72*

By : Bajaj Allianz Life

Every investor has an ideal dream, which is they want their invested money to double. The rule of 72 is simply, a technique which tells you if you want your money to double in a certain number of years, what kind of return your investment should give you.
So say you want your money to double in 9 years, then as per rule of 72, you need to divide 72/9. The answer is 8^, which is what your rate of return on investment should be for your money to double in 9 years. In simple words if you invest 10 lakhs today, for this money to become 20 lakhs at the end of 9 years, you need to get 8%^ return year on year.
So while choosing an investment option, look for products which have given 8%^ or more returns over a period of time.

^The assumed rate of return indicated above is for illustrative purpose and not guaranteed.

*The rules stated above are not to be construed as investment advice and readers are suggested to seek independent financial advice before making any investment decisions.