Rule 72

 Rule 72 is the useful Formula for finding how quickly amount will get double in value by discounting or by applying interest rate.

Dividing 72 by interest rate, we can come to know that in how many year given amount will get doubled.

Formula – 

72 / Interest Rate

Where, Interest Rate – Rate of Return on Investment

Lets us understand with example – 

Let suppose financial institution is launching a scheme to give 6% interest on investment. 

So if you will invest 1,00,000/- amount in above given scheme, your investment will get double i.e 2,00,000 in period 72/6 = 12 years

If the same scheme revises the interest rate to 8%, then the same invested amount 1,00,000/- will get double in 72/8= 9 years.