Lumpsum Calculator
Lumpsum Calculator
A lump sum investment is investing the entire amount in one single go.
Lump-sum investing is usually followed by HNIs and corporations, as they invest for long-term. A few retail investors having a high-risk tolerance may consider investing a lump sum amount.
This form of investing becomes extremely profitable if you are able to time the market on time. It is an ideal investment for the long-run.
Lump-sum Calculator work on the principle of future value. It helps you calculate the future value of your investment at a certain rate of interest in a given time period.
How does the Lumpsum Calculator work?
In order to use the Lumpsum Calculator, one should know the following terms:
Principal is the initial amount that an individual has invested.
Expected Rate of Interest is the interest percentage expected to be earned on the total investments over a period of time.
Tenure is the period for which the principal is invested.
Expected Returns is the total earnings from investments.
Maturity Amount is the total of Principal and Expected Returns.
Formulas:
A = P(1 + r/n)nt
E = A – P
Example:
Assume you invested Rs 10000 at an expected rate of return of 5% for 3 years.
Maturity Amount = 10000 X (1+5%)3 = Rs. 11576.25
Expected Returns = 11576.25 – 10000 = Rs. 1576.25
Why should you use a Lumpsum Calculator online?
Using the Lump Sum Calculator online helps you in making a financial decision on whether to invest in a particular financial product or not? on a real-time basis. Thus, helping you grab an opportunity quickly.
Advantages of using a Lumpsum Calculator:
Listed below are few advantages of using a Lumpsum Calculator:
The Lump Sum Calculator helps you in calculating the expected returns and total maturity amount irrespective of the currency denomination, that is, you can use it for calculation in INR, USD, JPY, EUR or any currency of your choice.
Lump Sum Calculator helps you in making decisions quickly that is because you can compare different financial products for investments on parameters like total investments, tenure or expected rate of return on a real time basis.
The Lump Sum Calculator does all the mathematics functions online with few inputs on your end. No coding or doing the maths is needed, this makes it easy to operate.
You can get an estimated maturity amount and the total expected returns for an investment calculated on Lumpsum Calculator, which helps in making a financial plan that matches your financial goals.