Some important formulae useful in day-to-day life

    Here are some important formulae that we need to know in our day-to-day life.

          1.  Compound Interest:

    CI (Compound Interest) = P(1 + r/100)ⁿ

Where

P = Principal 

r = rate of interest (per year)

n = no. of years

    2. The Rule of 72:

Number of years it takes the Principal to double is -

N = 72/r

where

r = rate of interest

n = no. of years

eg 1: 

If rate of interest is 6%

No. of years for the money to double = 72/6 = 12 years.

eg 2: 

If you want the money to double in 5 yrs.,

The rate of interest should be: 72/r = 5,

r = 72/5 = 14.4%

The Rule of 72
Total return %	Years required to double investment
1%	70
4%	18
5%	14
6%	12
8%	9
10%	7
12%	6
14%	5
16%	4.6
18%	4
20%	3.8
24%	3

3. Recurring Deposits:

Maturity value based on quarterly compounding:

M =R [ (1+i)ⁿ – 1]
         --------------------  
         1- (1+i) ^-1/3

where

M = Maturity value
R = Monthly installment
n = Number of quarters
i = Rate of interest/400