Mathematics of Personal Finance: Rule of Lumpsum 73.5

In the case of a Lumpsum investment, dividing 73.5 by the expected rate of returns gives you the number of years when your invested amount and earned interest will be almost the same. In other words, your invested amount will double, and your absolute returns will be almost 100%. This calculation applies irrespective of the monthly SIP amount.

For example, let’s consider Mr. A, who invested Lumpsum of Rs. 25,000 with an expected rate of return of 15%. According to the rule:

Number of years = 73.5/15 = 4.9 years (approximately 5 years).

By Sumit Tembhare

Author at Infofable

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