Total Investment

₹ 500

₹ 10,00,000

Expected Return Rate (p.a)

1%

30%

Time Period (in years)

1 yr

30 yrs

Investment Amount

Estimated Returns

Investment Amount

1,20,000

Estimated Returns

1,20,000

Total Value

1,20,000

Some of the advantages of using a lumpsum calculator are:

- You do not have to understand the lumpsum calculation to get a return estimate.
- It can show you your estimated value of investment within seconds. However, it is essential to note that the results provided by the lumpsum return calculator are only estimates because mutual fund investments do not provide fixed returns.
- The lumpsum calculator is a handy tool to estimate whether you can reach your financial goal with a specific mutual fund investment.
- You can use an online lumpsum calculator to estimate the value of investing in different mutual funds and then choose one that meets your needs.

The value of your lumpsum investment depends upon the market performance of investments. However, any lumpsum calculator uses the same formula to estimate returns from lumpsum investments. Dhan’s lumpsum calculator estimates your investment value using a compound interest formula.
The formula used is:

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

A is the estimated return

P is the present value of the invested amount

r is the estimated rate of return(in %)

t = total duration of investment

n is the number of times interest is compounded in a year

For instance, taking the example mentioned above, assume invest Rs. 50,000 in a mutual fund for 7 years and you expect an average return of 12% per annum. The interest is assumed to be compounded annually.

The formula for lumpsum calculations can be used as follows:

A = ₹50,000 {(1+00.12/1)^7}

A = ₹50,000 x 2.2107

A = ₹1,10,535

Instead of using this formula to calculate lumpsum investment on your own, using an online calculator like Dhan’s lumpsum calculator, is a much simpler way of computing your investment value.

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