Mutual Fund Lumpsum Calculator

Lumpsum is a method of investing in mutual funds. This is a one-time investment method. The lump sum is a popular method for large-amount investors. Similarly, the SIP method is popular for small investors. Both methods have their pros and cons. Lump sum Investors invest large amounts in one go and earn higher returns, whereas SIP follows the monthly investment of a small amount and earns fewer returns as compared to the SIP lump sum calculator.

What is a lump sum calculator? 

A lump sum calculator is a tool that calculates the investment return within seconds using three inputs only: the lump sum amount, expected return rate, and tenure, and displays results as invested amount, returns, and total maturity amount, as well as gives representation in charts for a better understanding and visibility. Whereas manual calculation is difficult for people who are not familiar with the mathematical compounding interest calculation, this tool does this task within seconds; it has a simple and user-friendly interface no matter if investors are familiar or not.

How Does the Lumpsum Calculator Work?

The lump sum calculator uses three inputs from investors, which are lump sum amount, expected return rate in percentage, and lump sum tenure. This lump sum calculator mutual fund estimates the future returns based on user inputs.
Let’s take an example and calculate the returns.

1. Enter Investment Amount: The investor has to enter the amount that they want to invest. Suppose the investor wants to invest a Rs. 500000 lump sum amount in a mutual fund.
2. Enter Expected Rate of Return: The investor has to select the expected rate of return percentage. Suppose the expected rate of return is 15%, as per historical data; usually previous data shows 10-15% returns.
3. Choose Investment Tenure: In this field, the user has to enter the tenure in years. Suppose the investor wants to invest for 10 years.

Let’s take the above inputs using a formula to calculate the future value of a lump sum.

Where:

• • A = A = Maturity Amount
• P = Principal (Initial Investment)
• r = Rate of Return (Annual Interest Rate)
• t = Time (in years)

Given your inputs:

• P=500,000
• r=15%
• t=10

We can plug in these values.

Now let’s calculate the maturity amount using this formula.

The total interest can be found as follows:-

Total Interest = A – P

Let me calculate these values for you.

Based on the calculations:

How to Use the Lump Sum Calculator?

Our lump sum calculator is a very simple and easy-to-use interface that just needs to provide 3 inputs to estimate the returns within seconds or in real-time, whereas in formula checking, calculating lump sum compounding interest is a difficult and time-consuming activity, and investors must be familiar with the mathematical calculations.

1. Just enter the lump sum amount in the field.
2. Enter the expected rate of returns. 
3. Choose the tenure of the investment in years.
4. This lump sum calculator is dynamic and auto-calculates the returns based on inputs.

SIP vs. Lumpsum: Which is better?

Both SIP and lump-sum investments have their own pros and cons.

• SIP (Systematic Investment Plan): Is the best option for large investors and small investors. It helps build large investments over time, especially for those who want to start investing small amounts. SIP helps investors to reduce the market risk and average the rupee cost in volatile markets. SIP gives fewer returns as compared to lump sum investment.
• Lumpsum Investment: This is the best option for those investors who are not regular investors in mutual funds and want to invest large amounts and get benefits from the market. Lump-sum investment gives higher returns as compared to SIP. A lump sum investment is ideal for stable or bullish market conditions where investors get much higher returns and the market is in their favor.

Both options have their pros and cons. Use the SIP and lump sum calculator to estimate the returns, and also check the market’s historical data for better financial goals.

Wrap-up Words

The Lumpsum Calculator at Toolifypro.com is a very simple and easy-to-use tool for one-time investments, whether calculating lump sums, investors exploring mutual fund calculators for estimating their investment returns, making financial plans for their future goals, or comparing the SIP Lumpsum Calculator to make easier and more effective financial goals. Start using our MF Lumpsum Calculator to achieve your financial goals.