ET Mutual Funds Explains: Want to know how many years will your investment take to triple? Use Rule 114
mutual funds tells you in how many years will your investments take to double, while Rule 114 helps you know in how many years will your investments take to triple.
In this rule, an investor takes the number 114 and then divides it by the investment product's rate of return to achieve this. In other words, in this rule you divide 114 by the rate of return to find out the number of years.
For example, if with a 6% return your investment amount will take 19 years to triple. Tripling your money might look like a long-term goal, but understanding this rule can help an investor set goals and make smart decisions.
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Suppose an investor is investing Rs 1 lakh with an expected rate of return of 10% per annum, then
Rule 114 = 114/ rate of return
= 114/10
= 11.4 years
This indicates that the investment will take around 11.4 years to triple or become Rs 3 lakh.
The below mentioned helps you in determining how many years will it take to triple your investments with different rate of return
Now suppose you want your investment to triple in 6 years, then:
Rate of return = 114/ time period
= 114/6
= 19%
This shows that in 6 years your investment will have to triple with a rate of return of 19%.
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The below-mentioned table helps you
