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# All about rule of 72

In finance, the rule of 72  is  method for estimating an investment’s doubling time
So if you want your money to double. 72 / 9 = 8 then 8 saal me @ 9% se apka paisa double hoga

Ye rule logic hai
BELIEVE IT OR NOT !!
Isliye logic wise 5 saal me agr paisa double krna h toh interest rate jyada honi chahiye .

In finance, the rule of 72, the rule of 70 and the rule of 69.3 are methods for estimating an investment’s doubling time. The rule number (e.g., 72) is divided by the interest percentage per period to obtain the approximate number of periods (usually years) required for doubling. Although scientific calculators and spreadsheet programs have functions to find the accurate doubling time, the rules are useful for mental calculations and when only a basic calculator is available.

These rules apply to exponential growth and are therefore used for compound interest as opposed to simple interest calculations. They can also be used for decay to obtain a halving time. The choice of number is mostly a matter of preference: 69 is more accurate for continuous compounding, while 72 works well in common interest situations and is more easily divisible. There are a number of variations to the rules that improve accuracy. For periodic compounding, the exact doubling time for an interest rate of r per period is

{\displaystyle T={\frac {\ln(2)}{\ln(1+r)}}\approx {\frac {72}{r}}} {\displaystyle T={\frac {\ln(2)}{\ln(1+r)}}\approx {\frac {72}{r}}},
where T is the number of periods required. The formula above can be used for more than calculating the doubling time. If one wants to know the tripling time, for example, simply replace the constant 2 in the numerator with 3. As another example, if one wants to know the number of periods it takes for the initial value to rise by 50%, replace the constant 2 with 1.5.

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This entry was posted on April 18, 2017 by in Uncategorized.

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