How to Calculate Returns of Mutual Funds Lumpsum Investment?

Mutual Funds are professionally managed, which allows you to earn inflation-beating returns often. The fund invests in Equities, Debts, or both depending on your financial goals and risk profile. There are possibilities of high liquidity, especially under Equity Funds. You can redeem your investment anytime. This allows you to meet all your financial requirements hassle-free. Lumpsum Investment is the most conventional way of investing in Mutual Funds.

Here, you invest a significant amount at once. If you wish to determine the returns you will reap through them, you can use the lumpsum calculator for assistance. Let us understand the concept of Lumpsum Investment and the usage of its calculator better.

Benefits of Lumpsum Investment


Lumpsum Investments are convenient. You make an investment in one go, and this frees you from the hassles of making periodic contributions. It is also time-saving as you need not check the market constantly and modify your investment contribution accordingly. Once you have made Lumpsum Investments, sit back, and wait for your fund to reap the desired returns.

Low expense ratio

You need to bear an investment cost called the expense ratio with Mutual Funds. With a Lumpsum Investment, you invest in all assets together. This often helps cut down on the associated investment cost. Besides this, Lumpsum Investments also have a lower maintenance cost.

Potentially reasonable returns

With a Lumpsum Investment, you invest a considerable amount in the markets. This provides an opportunity to reap potentially better returns. Generally, Lumpsum Investments are made for the long term. This offers your investment more time to grow in the markets. Use a Lumpsum Calculator to understand how a longer investment term can impact your returns.

How are the returns calculated?

Lumpsum Investment returns are calculated using a compound interest formula. You can use the following formula for the same:

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

Here’s what the following variables stand for:

  • A – Estimated returns
  • P – Present value of the investment
  • r– rate of return
  • t – investment term
  • n – Number of compound interests in a year

If the formula seems overwhelming, a Lumpsum Calculator comes to your rescue. Just enter your total investment amount and set the investment start and end date. Hit the calculate button, and you get the results within minutes. Using the calculator is the simplest way to calculate your investment returns.

If you do not have a significant amount in hand to make a Lumpsum Investment, consider opting for a Systematic Investment Plan. This way, you can make periodic contributions to your corpus as per your affordability. If you consider to invest in SIP, you can make the most of a favourable market standing and mitigate the associated risk.

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