If you read the article you will understand the rule 72. On Thu, Mar 26, 2015 at 3:18 AM, Narendra Gupta [email protected] [Thatha_Patty] <[email protected]> wrote:
> > > Can you please elaborate on '*the* *rule of 72...'?* > > Thanks & regards,.........................................Gupta > > ------------------------------ > To: [email protected]; [email protected] > From: [email protected] > Date: Wed, 25 Mar 2015 21:38:47 +0530 > Subject: [Thatha_Patty] Compound Interest and Rule of 72 > > > > > Firstly, when the money increases at a simple rate of interest, rule of > 100 comes into play. If the rate of simple interest is 10 % pa, the money > doubles in 10 yrs. For 5 % it is 20 years and for 4 % it is 25 years. > > When the money increases at a compound rate of interest,* the* *rule of > 72 comes into play.* It is a rough and ready approximate rule of the > thumb. If the rate of interest is 12 % compounding every year, the money > doubles in 6 yrs. For 9 % it is 8 yrs, for 6 % it is 12 yrs, etc etc. > > I don't remember when and from whom I learnt this rule of 72 but it is a > very handy thing. I have passed it on to many friends including bank > employees. Many of the bank employees did not know about it and were happy > to learn. > > Many years ago I read a news item. Someone had sued another person for a > few lakh rupees. His case was that about a hundred years ago his > grandfather had lent a hundred rupees to the defendant's grandfather. At > the sahukara rate of interest @ 12 % pa compounding every year, the sum > owed had gone into lakhs. I then remembered the rule of 72 !! > > When I joined the navy, my father advised me to join DSOP fund immediately > and save as much as I cmfortably could. He said that within a few years, > the annual interest would become more than my monthly contribution; after > that it would keep increasing even more. His advice was based on his > experience as a govt servant. It stood me in very good stead. This is > something we all can pass to our chilren and grandchildren. > > Now for an old old story. One day a learned Brahmin came to Raja's court > and told him that he had set up a game which he would like to show him. The > game was demonstrated and the raja was very happy to see the game -- the > game of chess. He wanted to give the Brahmin a reward but he refused. He > said it was his pleasure and hobby and the raja was happy, that itself was > his reward. When the raja persisted, the brahmin said that he wanted one > grain of wheat or rice etc placed on the first square, two on second > square, four on third, and keep doubling it till all 64 squares were > filled. The raja was livid. He said ' If you were not a learned man, you > would have been beheaded by now'. The learned man just smiled and said ' O > Rajan, fill up all 64 squares and feel free to behead me '. The way he > smiled, the raja thought there was something he may have missed out. So, he > ordered his courtiers to go ahead with the task. First few squares were ok. > Then they had to calculate the number of grains, followed by the weight of > grains. After some time they came to the conclusion that the job just could > not be done. The grains required to cover all 64 squares were so many that > they were just not available in the whole world. The raja stood up, folded > his hands and said ' Forgive me, O wise one, I have behaved like an > arrogant fool'. > > The above story illustrates the power of 100 % pa compound interest. Let > us check it out. I have just switched on my standars 8 digit calculator. 8 > digits give me one less than 100 millions. I press 2 and twice I press x. > Now we are ready. Press the = button and 2 changes to 4, this figure is for > 3rd square. Keep pressing = and the figure keeps doubling up. When we reach > the the 28th square, the figures are out of the calculato's range !!!! > > > -- > With best wishes > > S Chander > > __._,_.___ > ------------------------------ > Posted by: Narendra Gupta <[email protected]> > ------------------------------ > Reply via web post > <https://groups.yahoo.com/neo/groups/Thatha_Patty/conversations/messages/58136;_ylc=X3oDMTJydWpzdW5iBF9TAzk3MzU5NzE0BGdycElkAzE4OTk3Mzk4BGdycHNwSWQDMTcwNjAyNjA2NwRtc2dJZAM1ODEzNgRzZWMDZnRyBHNsawNycGx5BHN0aW1lAzE0MjczMjAxMjE-?act=reply&messageNum=58136> > • Reply to sender > <[email protected]?subject=RE%3A%20%5BThatha_Patty%5D%20Compound%20Interest%20and%20Rule%20of%2072> > • Reply to group > <[email protected]?subject=RE%3A%20%5BThatha_Patty%5D%20Compound%20Interest%20and%20Rule%20of%2072> > • Start a New Topic > <https://groups.yahoo.com/neo/groups/Thatha_Patty/conversations/newtopic;_ylc=X3oDMTJmaTVsaDI1BF9TAzk3MzU5NzE0BGdycElkAzE4OTk3Mzk4BGdycHNwSWQDMTcwNjAyNjA2NwRzZWMDZnRyBHNsawNudHBjBHN0aW1lAzE0MjczMjAxMjE-> > • Messages in this topic > <https://groups.yahoo.com/neo/groups/Thatha_Patty/conversations/topics/58132;_ylc=X3oDMTM3amhuMHA1BF9TAzk3MzU5NzE0BGdycElkAzE4OTk3Mzk4BGdycHNwSWQDMTcwNjAyNjA2NwRtc2dJZAM1ODEzNgRzZWMDZnRyBHNsawN2dHBjBHN0aW1lAzE0MjczMjAxMjEEdHBjSWQDNTgxMzI-> > (2) > > > **************************************************************************************************************************************************************************************************************************************************************************************************************************************** > > > Visit following to see uploaded files related to religious and informative > files uploaded. > > http://groups.google.co.in/group/thatha_patty?hl=en > > http://groups.yahoo.com/group/Thatha_Patty/ > > _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________- > > Visit Your Group > <https://groups.yahoo.com/neo/groups/Thatha_Patty/info;_ylc=X3oDMTJmY2E2M203BF9TAzk3MzU5NzE0BGdycElkAzE4OTk3Mzk4BGdycHNwSWQDMTcwNjAyNjA2NwRzZWMDdnRsBHNsawN2Z2hwBHN0aW1lAzE0MjczMjAxMjE-> > > > [image: Yahoo! 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