Calculate returns on your one-time investment
A lumpsum calculator helps investors estimate the future value of a one-time investment made in a mutual fund. Unlike SIPs, where you invest small amounts regularly, a lumpsum investment involves depositing a significant amount at once.
This tool is essential for anyone looking to park a large sum of money, such as a bonus or inheritance, into equity or debt funds to generate wealth over time. Ideally, estimates shown by the calculator are distinct from the actual market returns, yet they help in financial planning.
The calculator uses the compound interest formula to estimate returns. Since mutual fund returns compound over time, investing for a longer duration typically yields higher returns.
The formula used is:
Where:
For mutual funds, the compounding is usually considered annually, making the calculation simpler: A = P (1 + r)^t.