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Karunakar CH
What You DO That Def... • 5m
"The best way to predict the future is to create it." – Peter Drucker Finance Concept: The Rule of 72 is a simple formula used to estimate the time it takes for an investment to double in value, given a fixed annual rate of return. The Formula: Time to Double (years)=72 / Interest Rate (%) Story Format Explanation Imagine Ramesh has saved ₹10,000 and invests it in a fixed deposit offering a 6% annual return. He wonders how long it will take for his money to double without using complex calculations. One day, Ramesh’s friend Seema tells him about the Rule of 72. She explains: Divide the number 72 by the annual interest rate (in percentage terms). For Ramesh’s investment: 72 / 6 = 12 years What does it mean? If Ramesh leaves his ₹10,000 untouched in the fixed deposit, it will grow to ₹20,000 in 12 years. Ramesh gets excited! He realizes he can use the Rule of 72 for other investments too. For instance, if he finds an investment offering a 12% annual return, the time to double would be: 72 / 12 = 6 years. Why is this important for you? As an aspiring investor and entrepreneur: It helps you make quick decisions about investment opportunities. Gives you a better sense of how long it takes for your money to grow. Can guide you in comparing low-return vs. high-return investment options. Follow Our Medium blog for Finance and Business insights like this: https://medium.com/@FoundrBite
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