Lump Sum Calculator
Project the future value of your one-time investments and make informed financial decisions.
Lump Sum Inputs
Investment Projection
Principal Amount
₹1,00,000
Estimated Gains
₹2,10,585
Future Value
₹3,10,585
What is a Lump Sum Calculator?
A lump sum calculator is a financial tool designed to help you estimate the future value of a one-time investment. By inputting your initial investment amount, the expected rate of return, and the investment period, the calculator can project how much your money will grow over time, thanks to the power of compounding.
How to Use Our Lump Sum Calculator
- Enter the total amount you are investing at once in the 'Total Investment' field.
- Input the expected annual rate of return for your investment in the 'Expected Rate of Return (%)' field.
- Specify the total duration of your investment in the 'Investment Period (Years)' field.
- Click the 'Calculate' button to see the estimated future value of your investment.
Frequently Asked Questions (FAQs)
What is a lump sum investment?
A lump sum investment is a one-time investment of a significant amount of money into a financial instrument like a mutual fund, fixed deposit, or stocks, instead of investing in smaller, periodic installments like a SIP.
How does the lump sum calculator work?
The lump sum calculator uses the future value formula FV = PV * (1 + r/n)^(n*t), where FV is the future value, PV is the present value (your lump sum investment), r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years.
Is it better to invest in a lump sum or SIP?
The choice between lump sum and SIP depends on your financial situation and risk appetite. Lump sum investments can yield higher returns if the market is on an upward trend, but they are also riskier. SIPs help in averaging out the purchase cost and are less risky, making them suitable for most retail investors.
When is the best time to make a lump sum investment?
Ideally, the best time to make a lump sum investment is when the market is undervalued or has corrected significantly. However, timing the market is extremely difficult. A common strategy is to invest when you have a large corpus of money available, such as a bonus or inheritance.