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To understand the rule of 72 formula, you need to divide 72 by the expected annual rate of return. For example, say you invest Rs 1 lakh every year in an investment that earns 8% interest annually. Now if you divide 72 by 8, you will get 9 which gives you the number of years it will take for your money to double. So, your investment will grow to Rs 2 lakh in nine years. ....
The Rules of 72 and 114 play a crucial part in determining personal financial decisions when it comes to the power of compounding since they enable investors to determine how long it will take to double or triple their money at a particular rate of return or interest rate. ....