LUMPSUM Calculator

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About Lumpsum Calculator

A lumpsum calculator is used to by investors to calculate and figure out the expected returns on their mutual fund investments. 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 types 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.

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How can a Lumpsum Calculator Help You?

Mutual fund investors can use this calculator to figure out the expected returns on their investments. Before entering into the benefits of the use of this calculator, one have to realize the varieties of go back for a lumpsum funding.

  • Absolute go back
  • Total return
  • Annualised return
  • Point to point return
  • Trailing return
  • Rolling return

It’s paramount that an investor understands a majority of these forms of returns in details to avail the most benefits from their mutual fund investments.

Benefits of using a lumpsum calculator

After familarising you with the types of lumpsum calculator, let’s look at some of the advantages of using a lumpsum calculator:

  • Lumpsum calculator provides you with the predicted returns for the complete investment length. You may also calculate your investments of 1 year, three year and five year returns by simply using the lumpsum calculator.
  • It’s particularly handy and smooth to use. Even a layperson can use this calculator with relative ease.
  • It gives a fairly accurate estimate. Note that mutual fund investments are issued to market dangers, and can’t be expected with pinpoint accuracy.
  • A mutual fund lumpsum calculator allows an investor to plot his/her finances higher primarily based at the expected go back they are maximum possibly to get hold of at the end of their investment length

Formula to Calculate Mutual fund returns

All mutual fund lumpsum calculators use a specific method to compute the estimated return on the investments. It is basically 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 The variables are mentioned in the table below. A = Estimated return P = Present value r = Rate of return t = Duration of investment n = Number of compounded interests in a year This formula can be used to calculate the returns on mutual funds. For example, an account holder has invested Rs. 15 Lakh in a fund with a 12% return for a 5-year period compounding every 6 months. The estimated return in this example would 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 mutual fund lumpsum 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.

Why choose a lumpsum calculator to calculate your investments?

After familarising you with the types of lumpsum calculator, let’s look at some of the advantages of using a lumpsum calculator:

  • The mutual fund lumpsum calculator is an easy to apply tool which presents an investor the wealth won and maturity fee for a given investment amount, investment period and predicted returns from the investment.
  • For a prospective investor, it is critical to estimate whether or not the investment option selected will meet the economic desires on the quit of the investment term or now not.
  • It gives a fairly accurate estimate. Note that mutual fund investments are issued to market dangers, and can’t be expected with pinpoint accuracy.
  • Our mutual fund lumpsum calculator gives each, SIP calculator and a lump sum calculator. An investor can use it to calculate returns below both the technique, lumpsum, and SIP.
  • The mutual fund lumpsum calculator facilitates an investor to get an estimate of the returns and wealth he could create inside the destiny for a given investment length.
  • A calculator presents an investor with the power to exchange the period, quantity, fee of go back and get an estimate of returns. An investor can set a couple of combos of an amount to be invested, tenure, charge of return and then decide what’s the premiere aggregate.
  • With a monetary intention in thoughts, an investor can use the calculator and discover if his/ her dreams are being met or not.
  • The calculator is very simple and smooth to use. An investor simplest desires the records required handy
  • An investor may be capable of controlling his price range better as soon as he has an envisioned idea in their funding.
  • It saves time for the guide calculation to be made by way of the investor and also enables in heading off mistakes.

How Does a Mutual Fund Lumpsum Calculator Work?

The mutual fund calculator is easy and simple to use, an investor just needs to enter the required details and the calculator calculates the earning on the investment and the maturity amount The mutual fund calculator is straightforward and easy to apply, an investor just desires to go into the required details and the calculator calculates the incomes on the funding and the adulthood quantity

  • The amount of lump sum cash you’re inclined to invest in a mutual fund
  • The period for which you need to be invested within the mutual fund
  • It gives a fairly accurate estimate. Note that mutual fund investments are issued to market dangers, and can’t be expected with pinpoint accuracy.
  • The anticipated charge of return that the scheme might earn

Once the above variables are entered, the calculator will provide the destiny cost of the funding quantity.

What are the variations between mutual fund lumpsum investments vs. SIP?

The key variations for an investor to pick between mutual fund lumpsum investments vs. SIP are listed below: The well-known concept rupee cost averaging is a vital decisive aspect in differentiating each of the processes of mutual fund investments. When an investor invests in a phased way i.E. A systematic funding, his investments get a better NAV whilst the price is going up and more units allocation while the charge is going down i.E lower NAV. The market movements and volatility for a fixed asset or the commercial area is near to not possible. The SIP approach averages out market movement because the funding length is spread out. The allocation of gadgets is based at the NAV of the mutual fund at the day of investment. When an investor invests a lump sum amount, the units could be allotted based totally at the NAV one-time. So the investment is blocked for that NAV no matter the usage and downs of the prices of the assets and mutual fund NAV. On the opposite hand, whilst an investor invests through SIP, the devices are allotted on the fee or NAV usual at every installment of the funding. This gives the investment advantage of the marketplace motion. On maturity, the final wealth gained might be the wide variety of gadgets to be had and the NAV at the time of selling the gadgets. A better number of devices of mutual finances could mean a better wealth won. An investor ought to select an funding technique which gives a better quantity of units The primary difference between lumpsum mutual fund funding and SIP is the method set. The lumpsum investment is ready for the timing of access, a continuously developing market might assist avoid volatility while a falling NAV marketplace can provide a negative impact on funding. The SIP funding method is about area and rule-based totally investment to make the investment proof against marketplace fluctuations

Frequently Asked Questions

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