Long-term investments in mutual funds and share market give returns of more than 10 percent.
Money Making Tips Everyone wants to become rich. Who doesn’t want to double their money? And there are many schemes in the market which claim that your money will double in so many days.
After all, this question must have come at some time or the other that how money is double in the end. What is the formula that can be adopted to fulfill your financial dreams. Compound interest works behind double the money.
If you understand this compound interest formula, then you too can double your money.
In how many years the money doubles (Double your investment)
Although the interest rate of banks is very low, yet if you act wisely, you can double your money before the speed of the bank. You have to keep saving. Your money will double in 7 years and compound interest will work to increase your investment. The benefit of compounding is seen in long term investments.
How compound interest works
Suppose you deposit 1000 rupees somewhere and get an interest of 10 percent per annum. After one year you will have Rs 1100. Next year due to compounding, you will get 10 percent interest on Rs 1100 and your money will increase to Rs 1210. Then next year 10 percent interest will be received on Rs 1210 and this cycle will continue year after year. You will see your money grow with time.
When will your money double (double money)
There is a common rule to calculate when your savings money will double and this is Rule 72. It is used a lot in the field of finance. Through Rule 72, you can know in how much time your investment money will double. Let us know its formula.
understand by example
If you invest Rs.1000 on which compound interest is 10% per annum, then as per Rule 72, it will take 72/10=7.2 years to double this investment. If you invest a larger amount than this, then that amount will increase to 2 times after 7 years.
Start investing soon
To save big, we have to start early. If you start investing Rs 5,000 from the age of 25. And if you get a return of 10 percent annually on this, then at the age of 60 you will have a fund of more than one crore rupees.
Invest through SIP (systematic investment plan)
Long-term investments in mutual funds and share market give returns of more than 10 percent. Therefore, it is wise to start a SIP of a fixed amount every month. SIP may be less money, but it will collect a good amount for you in the coming time.
