Lumpsum Calculator Online
The Lumpsum calculator will help you understand a mutual fund investment and calculate your investment returns. If one can have a target amount or goal, you can calculate the investment required to achieve that goal with the lumpsum calculator.
What is Lumpsum Calculator?
A lump sum calculator is a tool that helps you to get an estimated return on your total investment. You need to fill in a few necessary details like the amount you have invested (or want to invest), the period for which you will hold your investment and the rate of return that you expect from the particular mutual fund scheme to get an estimate of the returns.
How Can Lumpsum Calculator Help You?
Mutual fund investors can use the lumpsum calculator to determine the estimated investment returns. Before getting into the advantages of using this calculator, one must know the types of returns for a lumpsum investment.
- Absolute return
- Total return
- Annualized return
- Point-to-point return
- Trailing return
- Rolling return
It's predominant that an investor understands all these types of returns in detail to avail the maximum benefits from their mutual fund investments.
How Does a Lumpsum Calculator Work?
A mutual fund lumpsum calculator is an automated tool that does all the complicated math for you. Lumpsum Calculator Formula to calculate mutual fund returns
Lumpsum calculators use a specific formula to compute the estimated returns on investments. It is a compound interest formula, with one of the mutable being the number of times the interest had compounded in a year.
A = P (1 + r/n) ^ nt
Here,
A = estimated returns
P = Present value of an investment
r = estimated rate of return
t = tenure
n = number of compound interests in a year
Let's understand this with an example.
Sanjay invests Rs15 lakh in a mutual fund scheme that offers average returns at 12% p.a. and compounds every six months for five years.
The estimated future returns, in this case, would be:
A = 15,00,000 (1 + 12/2) ^ 2/5
As you can assume, this is a complex equation that most novice investors need help to grasp. Here's where a lumpsum calculator comes to your rescue and makes this calculation instantly.
In this case, the estimated returns at the end of the tenure would be Rs26,43,513.
How to use the Lump Sum Calculators?
The Lumpsum Calculator shows you the future value of your mutual fund investment in seconds.
To use the Lumpsum Calculator:
- You should enter the investment amount.
- Fill up the duration of investment in years.
- Then you enter the yearly expected rate of return.
- The Lumpsum Calculator will show you the return on your investment. It also displays wealth gain.
Benefits of Lumpsum Calculator:
The Lumpsum Calculator shows you the return on a lumpsum investment in seconds.
- The calculator helps you evaluate if you can reach the financial goal at the last of the investment term.
- It is an excellent tool for finding the return on a lumpsum investment in mutual funds.
- Lumpsum Calculator helps you manage finances as you have a plan for the maturity value of your funding.
- It is convenient and easy for novice investors to calculate their investment returns.
- You can select investments that offer a return above inflation to reach investment goals over the long term.
Conclusion:
In conclusion, lump sum calculators are a helpful resource for estimating potential earnings or savings from a lump sum investment. While results may vary, they offer a starting point for financial planning. However, consulting with a financial advisor is recommended for a more tailored and accurate analysis.
Faqs:
Is the Lumpsum calculator accurate?
Lumpsum calculators can give accurate estimates of your investment value depending on the variables you enter. They do not factor in market volatility or charges.
Is Lumpsum Calculator easy to use?
Yes, Lumpsum is extremely easy to use. The tool asks you to enter the initial lump sum investment amount, duration, and expected rate of return to give you the estimated investment value within seconds. Using the MF lumpsum calculator, you also get a breakdown of your investment value and wealth gain.
What is the maximum limit of lumpsum?
There is no limit to the maximum amount you can invest in a lump sum in mutual funds.
What is the minimum amount for lumpsum?
The minimum amount for a lump sum mutual fund investment varies from scheme to scheme. This amount can range from Rs.500 to Rs.5000.
What is the disadvantage of lumpsum?
A lump sum agreement presents a higher risk to a contractor. Measuring the number of changes takes time and effort. Such contracts require paperwork and records of change orders from each phase, so further documentation is needed.
Can I do a lumpsum every month?
If you have enough knowledge about the market and related fluctuation adjustments, consider investing using a lump sum option keeping other factors in mind. The same amount can be made monthly in a lump sum instead of investing via SIP.