Investments in Mutual Funds can be broadly classified into two types- lumpsum and SIP. A lumpsum investment is when the depositor invests a significant sum of money on a particular mutual fund scheme. SIP or Systematic Investment Plan, on the other hand, entails the investment of smaller amounts on a monthly basis.
Both these type of mutual fund investment strategies have their fair share of benefits. Lumpsum investments are particularly preferred by a majority of investors, as there are lesser variables involved and returns are generally on the higher side. To find out the estimated returns on your lumpsum mutual fund investment, you may use a mutual fund lumpsum calculator available online.
Mutual fund investors can use this calculator to figure out the estimated returns on their investments. Before getting into the benefits of using this calculator, one must know the types of return for a lumpsum investment.
It’s paramount that an investor understands all these types of returns in details to avail the maximum benefits from their mutual fund investments.
All lumpsum calculator mutual fund uses a specific method to compute the estimated return on investment. It is essentially a compound interest formula with one of the variables being the number of times the interest is compounded in a year.
The formula is as follows:
A = P (1 + r/n) ^ nt
Here: –
You can use this formula to compute your mutual funds returns accurately. For example, imagine investing Rs. 15 Lakh in a fund with a 12% return for 5-year period compounding every 6 months.
The estimated return in this scenario will be-
A = Rs. 15, 00,000 (1 + 12%) ^ 5
As you can surmise, it’s a complex equation which may be out of grasp for a majority of investors. A lumpsum MF calculator will calculate it instantly. In this case, your estimated return at the end of a 5-year period shall be Rs. 26, 43, 513.
FlipItMoney’s SIP calculator comes with following benefits: -
FlipItMoney’s SIP Lumpsum Calculator ensures that your savings portfolio is as per your requirements and financial needs.
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