Quadruple: ET Mutual Fund Explains: How many years will your investment take to quadruple? Use Rule 144

Mutual fund investors always want to know how many years it will take to double, triple or quadruple their investments. The last rule in the list is Rule 144 which tells how many years your investments will take to quadruple.This rule is double of Rule 72, that is, two multiplied by Rule 72 is equal to Rule 144.

Rule 72 requires one to divide 72 by the rate of interest at which one is investing. This will give the number of years that an invested amount will take to double.

The rule is mainly for the investors who stay invested for a long-term period.

Suppose an investor wanted to invest Rs 1 lakh with an interest rate of 6%, then the money invested will grow to Rs 4 lakh in 24 years. So to check the number of years, just divide 144 by the interest rate of the product.

Also Read | Buy-the-dip didn’t work for mutual fund investors on election result day due to ‘tech glitch’If an investor is investing Rs 1 lakh with an expected rate of return of 10% per annum, thenRule 144 = 144/ rate of return

=144/10

= 14.4 years

This indicates that the investment will take 14.4 years to quadruple or become Rs 4 lakh at an interest rate of 10%.

The below table helps an investor in determining how many years it will take to quadruple their investments.

ET Online

Suppose an investor wants the investment to quadruple in 6 years, then

The rate of return = 144/time period

=144/6

= 24%

This shows that to quadruple your investment in 6 years, the rate of return has to be 24%.

Also Read | Thematic MFs offer up to 14% return in May. Have you invested in any?

The below table shows what rate of return you will earn at different time periods.

Rule 144 Rate of ReturnET Online

This rule applies to investors who stay invested for a longer horizon in order to watch their money grow four times.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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