Rule of 72 - Explained in Hindi - YouTube

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MUSIC

Namaskar, my name is Mukul, and welcome to asset Yogi.

Where we unlock finance knowledge.

In this video, I am going to discuss a smart trick

Which we call Rule of 72.

Or in Hindi, we also call 72 ka niyam(rule)

I usually use this trick in my daily life as well.

Where I want to calculate something.

Suppose something is growing in a compound manner

And I want to find out in how much time it will be double.

So we can calculate it with the rule of 72 in seconds.

If you give an example of its application

If you invest in FD

Where your money grows at 8% per annum in a compounded manner

So in how much time will your money double?

Or If you want to find out

If inflation increases by 6%, then in how much time will the prices of all the commodities,

And all the goods which you buy daily will be doubled in price.

You can do this calculation quickly with the rule of 72.

in fact, if we look in a reverse way also

Suppose you want to double your money in 6 years

So by what percentage do you have to grow your money?

Rule of 72 can also calculate it quickly.

If you do the actual calculation

If you will calculate with excel or calculator

or you will calculate manually

So firstly, it will take more time

And secondly, you will also require resources.

At Least you will need a laptop to operate Excel.

or you need a calculator

But the rule of 72 will be very useful in your daily life.

So keep watching this video till the end.

Let's go straight to the blackboard.

To understand the rule of 72, let us compare investments.

Suppose the percentage return you get in mutual funds.

These are generally compound returns

You get 15% per annum compound returns.

If you compare with FD then you get 8% per annum returns

If you save your money in a savings bank account

So let's say you get 4% per annum returns

This is the kind of approximation

It is not hard and fast that you will get the same number of returns.

It can be more or less.

But we want to find out and compare

At what time does the money double in all these three cases?

So I'll calculate this quickly and tell you.

In the case of mutual funds, the money will double in about 5 years.

Approximately in 5 years.

If I tell you the exact figure, the money will double in 4.8 years.

In the case of FD, it will double in 9 years.

And in the case of a savings account, it will double in 18 years.

By comparing, you get the idea in a better way.

When you Calculate time to double money

Here, it will take about 4 years extra.

If you keep your money in FD It will take 4 years to double the money.

If you keep money in a savings account

If we compare it with FD so there's a straight 9-year difference

If we compare mutual fund and savings account

There is a straight difference of 13 years

If you can grow your money in mutual funds,

So in 18 years, you will double your money three to four times in the mutual funds

So in this way you can compare your investments.

But the question arises how did I do this calculation so quickly?

There are many ways to calculate

First, let us see what methods are available to us in general.

either we can calculate manually

how to calculate manually

You have ₹ 1,00,000 as of the date

I take the example of 15%.

So let say let's say our date is 0

How much money will it be after 1 year?

1×1.5 = 1.15 lakhs

How much will it be in the second year? Again add 15%

Again multiply 1.5 with 1.5

So the value will be 1.3225.

And go on doing it like this.

In the third year also multiply 1.3225 with 1.5

So the value will be around 1.52

Again multiply 1.15 with the value of fourth-year 1.52

So the value will be 1.75

And in the fifth year when you will again multiple 1.75 to 1.15

So the value will be around 2.01

In the fifth year approx.

Almost in 5 years around 4.8 - 4.9, your money will double.

And I had quickly calculated this.

We will learn how you can calculate it quickly with the Rule of 72

But I want to explain to you once

What is its importance ?

We can calculate the same thing with the formula of compound interest.

The final amount is equal to principal multiplied by 1+R

R is the rate of return

And N is a period.

Double it, if you calculate by this.

A will be 2

And principal will be 1 and Multiplied to 1+ 0.15,

the rate of return will be 0.15 if we are talking for the 15%

And raise to the power n

Now you have to solve n with the log.

So it is not easy to calculate with this formula also.

The third option is Excel.

The calculation can be done in Excel.

But in that, you must know the exact formula

and secondly, you must have a laptop

Or you have to operate excel on your mobile

So we talked over what traditional methods you have.

So we talked about 3 traditional methods.

that consumes a long time

Or you should have resources.

Now let's talk about Rule of 72.

In which the calculation is done in 2 seconds.

What does Rule of 72 say?

If you have to find out at how much time the money will double

So simply divide the rate of return by 72.

So if we look at our example

so what you have to do

Simply divide 72 by 15. 15 is our rate of return.

So the result is 4.8 years.

If you want to calculate 8%, divide 72 by 8.

So the result is 9 years.

If you want to calculate 4%.

divide 72 by 4.

The result is 18 years.

It is very simple to calculate in this way.

The calculation takes just 2 seconds.

You can also boast in front of your friends

Let me tell you its other applications as well. for example,

suppose today's inflation is 6% per annum and

you want to find out in how much time the prices will double.

So simple calculate by n= 72/r

72 divided by 6

If inflation is 6% then prices will double within 12 years

If it keeps increasing by 6% every year.

And if we want to find out in how much time our salary will double.

Suppose you get a 10% annual increment every year.

So what you have to do

n = 72/r

Divide 72 by 10.

Your salary will double in about 7.25 years

Suppose you think that you have to double your salary sooner.

So how quickly do I have to do to double my salary

Suppose if I grow by 15% so can divide 72 by 15.

So what will be the value? So we have seen that the value will be 4.8.

So your value will double in about 5 years if you grow by 15%.

You can also use it in a reverse way

If you want to find out how many returns you require

Let's say you have time, you know you have to double some money in 6 years.

So how many returns do you want to double your money?

So reverse it.

Instead of n = 72/r

Calculate r = 72/n

So the R will be

72/6

if you grow your money by 12% per annum, then it will twice in 6 years.

I give you one more example,

Suppose you have any social media channel for example

If you want to increase your followers on Instagram

Let's say you want to double your followers in 1 year.

And you want to know how many percent of followers you have to gain every month?

So here too r = 72/n

72 divided by

there are 12 months in 1 year

We want to calculate the monthly Rate of Return

If your followers grow 6% per month, it will double after 1 year.

In this way, you can use the rule of 72 in many applications.

If you want to find out how long it will take to double

And at what rate of return will it be double you can also find this.

Or if you want to find out how much rate of return you need

to double anything at a particular time so you can find this too.

I am sure this quick calculation will be very useful for you.

I tried to cover all the major points in this video

However, if there was any point I missed or you want to add something else.

So you can comment below

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