The two main categories of mutual fund investments are lump sum and systematic investment plans (SIP). When a depositor makes a sizable one-time investment in a specific mutual fund scheme, this is known as a lump sum investment. On the other hand, a SIP, or systematic investment plan, involves making modest monthly investments.
Both of these mutual fund investment techniques have a good number of advantages. Most investors favour lump sum investments in particular since there are fewer variables involved and profits are typically higher. You can use a mutual fund lump sum calculator that is online to determine the anticipated returns on your investment.
How can a lump sum calculator help you?
Investors in mutual funds can use this calculator to assess the expected returns on their investments. Before discussing the advantages of utilising this calculator, it is important to understand the different sorts of return on a lump sum investment.
- Unqualified return
- Total revenue
- Annualised return
- Return from point to point
- Upon return
- Continuous return
To get the most out of their mutual fund investments, it is critical for investors to fully comprehend each of these sorts of returns.
Now that you are aware of the different types of returns, let's explore the advantages of using a lumpsum return calculator:
- You can use this calculator to get an estimate of the returns over the course of your investment. Using this calculator, you may determine the 1-, 3-, and 5-year returns on your investments.
- It is highly practical and simple to use. This calculator is simple enough to use for the average individual.
- It provides a rather accurate estimation. It should be noted that investments in mutual funds are susceptible to market risks and cannot be precisely forecast.
- An investor can use an MF lumpsum calculator to better organise their finances based on the projected return they are most likely to earn at the conclusion of their investment period.
Calculation of mutual fund returns
Every lump sum calculator mutual fund calculates the anticipated return on investment using a certain formula. The number of times the interest is compounded in a year is one of the variables in what is essentially a compound interest calculation.
The formula is as follows:
A = P (1 + r/n) ^ nt
A - Estimated return
P - Present value
r - Rate of return
t - Duration of investment
n - Number of compounded interests in a year
SIP vs Lump sum
| Parameter | SIPs | Lump-Sum |
|---|---|---|
| Number of Investments | Multiple, usually monthly or quarterly | Single, one-time investment |
| Tenure of Investment | Long-term, can range from 1 to 30 years | Flexible, can be short or long-term |
| Cost of Investment | Small, regular contributions (as low as 500) | Large, one-time payment |
| Average Cost | Benefits from rupee cost averaging | Depends on market rate at time of purchase |
Benefits of utilising the StockGro lump sum calculator
A mutual fund lumpsum calculator is a very useful financial instrument that offers a number of advantages.
- Since mutual fund returns are susceptible to market risks, they cannot be computed with precision. Using a calculator will give you the most accurate estimation.
- You can organise your funds based on the anticipated profits thanks to it.
- Because it is an online tool, you can access it from anywhere at any time. Time and space restrictions are gone.
- You will save time and effort because these calculations can take a while. Manually performing computations for multiple variations can take hours.
Lumpsum Calculator FAQs
How do you calculate lump sum?
FV - Future Value
PV - Present Value
n - Number of years
r - Interest Rate.
Is lump sum good or SIP?
Which is more advantageous - lump sum or SIP?