Money Tips: What is the 8-4-3 Compound Formula which doubles the money..

When you invest your money anywhere, you do not get interest on it immediately. Interest is received after some time. How much interest you will get and when it will be received depends on the amount of your investment. There are two types of interest. One is simple interest and the other is compound interest. In this article, we will tell you about a formula related to compounding, under which your money will double on investing. Before understanding this formula, let us know a little about simple interest and compounding.

Compound and simple interest

Simple interest is received on your principal. At the same time, the compound also gives interest on the interest received on your principal. That is, in compounding, interest is received on interest. For example, if you are getting 12 percent interest annually on Rs 100, then after one year you will get a simple interest of Rs 12 and it will continue to be received like that in the future as well. At the same time, in the compound, interest will be received by adding both 12 and 100. In the first year, you will get Rs 112, and next year you will get 12% interest on Rs 112.

8-4-3 formula of compounding

This formula of compounding doubles your investment. Suppose you deposit Rs 21,250 every month in any scheme and you get 12% compound interest on it, then in 8 years your total investment will be Rs 33.37 lakh. On the other hand, if you deposit the same amount for 4 more years, then your total investment will be around Rs 67 lakh and if you extend the investment for 3 more years, then the total deposit will be around Rs 1 crore. On the other hand, if you invest in the same way for 6 more years, then your amount will become around Rs 2 crore in 21 years. With this formula of compounding, your investment will double in 12 years only, but if you want to invest more than Rs 1 crore, then you will have to deposit money in the scheme for 15 years.