Lumpsum Calculator

What is Lumpsum Investment?

When an entity (individual or organisation) invests the entire principal amount in any type of mutual fund in one go, it is known as a lumpsum investment. High Net Worth Individuals (HNIs) or big-shot investors who have a substantial sum of money to invest or individuals with long-term investment ambitions sometimes adopt the lumpsum investment approach. However, to make a lumpsum investment in mutual funds, you must first do a thorough examination of the present market conditions.

What is a Lumpsum Calculator?

A lumpsum calculator is a cutting-edge tool that allows investors determine their ROIs when making a lump sum investment in the mutual fund. The Urban Money Lumpsum Investment Calculator caters to the computation of the maturity amount for a specified lumpsum investment. It depicts the probable wealth that the individual will gain in a particular time frame for the said amount invested initially.

How Does a Mutual Fund Lumpsum Calculator Help You?

The Urban Money Lumpsum Calculator can be used by investors to assess the expected returns on their lumpsum investments and whether a certain investment option will help them achieve their financial objectives or not.

A mutual fund lumpsum calculator can be helpful in the following ways:

• It calculates the expected return over the full investment tenure. To get a precise approximation, you will require specific details, including the investment amount, estimated rate of return and investment tenure in years.
• Once the investors have a projected concept of the maturity value of their investments, the lumpsum calculator allows them to put forward better planning and management of finances.
• Using a lumpsum investment calculator saves time and helps eliminate human errors.
• A lumpsum return calculator is a simple and convenient tool to use, even for inexperienced investors.
• It’s important to keep in mind that because mutual fund investments are susceptible to market risks, exact returns cannot be predicted.

How Does a Lumpsum Calculator Work?

A mutual fund lumpsum calculator is a handy yet automated tool, which carries out all typical mathematical computations on your behalf. To compute values with utmost ease, be prepared with specific values, including:

• The investment quantum
• The term for which the amount will be invested
• The estimated rate of return that the individual predicts to earn through mutual fund investment.

Once you enter the above-mentioned inputs into the lumpsum calculator, you will get your investment’s maturity value easily.

Lumpsum Calculator Formula to Calculate Mutual Fund Returns

A lumpsum calculator works on a compound interest formula for computing the estimated investment returns wherein one variable represents the number of times the levied interest rate is compounded annually.

A = P (1 + r/n) ^ nt

Where,

• A represents the estimated returns
• P represents the current investment value
• r denotes the estimated rate of return
• t is the time frame for which the investment is made
• n denotes the number of annual compound interests

For better understanding let’s go through an example.

Ravi invests INR 15 lakh as a lumpsum investment in a mutual fund scheme with average returns rate of 12 percent per annum and compounds in the interval of six months for the term of 5 years.

The case-specific estimated returns would be:

A = 15,00,000 (1 + 12/2) ^ 2/5

This accounts to be a complex equation that would be difficult to grasp for a major percentage of novice investors. That’s exactly where a lumpsum calculator will come into play to compute the values in a fraction of a second.

When computed through the formula, the estimated returns at the end of investment tenure would be INR 26,43,513.

Difference Between Lumpsum and SIP

Although SIP and lumpsum investments are both part of mutual funds, they differ on various parameters.

Why Should You Count on a Lumpsum Calculator?

• The Lumpsum Calculator allows you to access the overall returns on a lump-sum investment in split seconds.
• You get the chance to determine whether you will accomplish your financial obligations at the end of the investment period or not.
• It is an easy to use cutting-edge tool to figure out lump-sum investment returns.
• A lumpsum investment calculator allows you to plan and manage your finances in a better way by giving you an estimate on investment returns.
• It offers the utmost convenience to novice investors for computing the return on their investments as they don’t have to count on any tricky mathematical formulas anymore.
• You get the flexibility of choosing investments that offer return beyond inflation for achieving investment goals over an extended time frame.