The Rule of 114 works similarly to the Rule of 72, but it helps you estimate how long it will take for your investment to triple in value. By dividing 114 by the expected rate of return, you can get a rough estimate of the time required for your investment to triple.
Tripling Time = 114 / Rate of Return
For example, if you invest ₹1,00,000 with an expected return of 10% per annum:
Tripling Time = 114 / 10 = 11.4 years
This means your investment is expected to triple in 11.4 years.
Similarly, if you want your investment to triple within 6 years, you can calculate the required rate of return:
Rate of Return = 114 / Tripling Time
So, for 6 years:
Rate of Return = 114 / 6 = 19% per annum
This formula is helpful for estimating the time or interest rate needed to achieve triple returns on your investment.