Lumpsum Calculator

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What is Lumpsum Investment?

A lump sum investment involves investing a large amount of money in one go, typically in mutual funds. It is a preferred choice for long-term investors, especially those with high-risk tolerance or receiving windfalls like bonuses or inheritances. While it can yield good returns if timed well, it’s important to align the investment with your financial goals, risk appetite, and time horizon. Since it may not suit short-term needs, consider your liquidity requirements before investing.

What Is Lump sum Calculator?

A lump sum calculator is a utility tool that helps you assess your wealth gain over the long-term. It is a smart tool to calculate the return on a lump-sum mutual fund investment. A lump sum calculator consists of a formula box, where you enter the investment amount, investment period in years, and the annual rate of return expected on the investment. The lump-sum calculator will show you the expected amount and the wealth gain in seconds.

How Does Lumpsum Calculator Work?

a lump-sum calculator tells you the future value of your investment at a certain rate of interest, using the following formula: 

FV = PV(1+r)^n
Where,  

  • FV = Future Value 
  • PV = Present Value
  • r = Rate of interest 
  • n = Number of years 

Example For Lumpsum Calculator

Let us assume that you have invested a lump sum amount of Rs 1,00,000 in a mutual fund scheme for 20 years. You have the expected rate of return of 10% on the investment. You may calculate the future value of the investment as: 

FV = 1,00,000(1+0.1)^20 

FV = Rs 6,72,750.

Henceforth, you have invested Rs 1,00,000 which has grown to Rs 6,72,750. 

The wealth gain is Rs 6,72,750 – Rs 1,00,000 = Rs 5,72,750.

How To Use ClearTax Lumpsum Calculator?

The ClearTax Lumpsum Calculator shows you the future value of your mutual fund investment in seconds. To use the ClearTax Lumpsum Calculator.

  • You must enter the investment amount.
  • Fill up the investment duration in years.
  • You then enter the annual expected rate of return.
  • The ClearTax Lumpsum Calculator will show you the return on your investment. It also displays the wealth gain.

Benefits Of ClearTax Lumpsum Calculator

  • The ClearTax Lumpsum Calculator shows you the return on a lump-sum investment in seconds.
  • It helps you evaluate if you can reach the financial goal at the end of the investment term.
  • It is an excellent tool to find the return on a lump-sum investment in mutual funds.
  • It helps you manage finances better as you have an idea of the maturity value of your investments.
  • It is easy and convenient for novice investors to calculate the return on their investments.
  • You can select investments that may offer return above inflation to achieve investment goals over the long-term.

In conclusion, a lump sum investment can be a powerful tool for long-term wealth creation when used wisely. Just ensure it aligns with your goals and liquidity needs to make the most of your money.

Frequently Asked Questions

How does the ClearTax Lumpsum Calculator show the Wealth Gain?

You will have to enter the initial lump sum investment amount, expected rate of return and the duration of the investment. The ClearTax Lumpsum Calculator will calculate the wealth gain based on the difference between the initial investment and the return on your investment.

Can the ClearTax Lumpsum Calculator show the return from mutual fund investment?

Yes, the ClearTax Lumpsum Calculator calculates the return on a lump sum mutual fund investment. You can estimate the wealth creation for a lump-sum investment over a specified period, in a mutual fund scheme of your choice.

How does the ClearTax Lumpsum Calculator help you achieve the financial goal?

The ClearTax Lumpsum Calculator shows you the return on a lump-sum investment. You may use the calculator to calculate the return on a lump sum mutual fund investment over a period and an expected rate of return. You can select investments that give return above inflation for financial goals such as a child’s education and marriage, retirement planning, or buying a dream house.

Is the ClearTax Lumpsum Calculator easy to use?

Yes, the ClearTax Lumpsum Calculator is easy to use the tool. You just have to enter the lump sum amount, duration, and the expected rate of return on the investment. The ClearTax Lumpsum Calculator will calculate the return on the investment and the wealth gain in seconds.

Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.

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