Lumpsum Calculator

By Tibor Pal, PhD candidate
Last updated: Nov 12, 2021

We created this mutual fund lumpsum calculator to help you resolve any lumpsum-related matter. More specifically, you can use the present tool to answer the following questions:

  • What will be the final balance of a particular lumpsum investment?
  • What should be the initial lumpsum to reach a specific goal?
  • What is the required period to reach a particular goal?
  • What is the required rate of return for the lumpsum investment?

In addition, you can easily estimate your return so that you can apply our tool as a lumpsum return calculator. Also, we added the possibility to include the inflation rate to check how chaining buying power would affect your lumpsum investment.

Read further, and we show you how to use the lumpsum return calculator. We also explain the meaning of lumpsum and you can learn the difference between lumpsum and SIP (Systematic Investment Plans).

What is the meaning of lumpsum investment?

If you want to make a lumpsum investment, you need to deposit a single, bulk amount of money into a one-time mutual fund investment. The other typical investment type is the SIP (Systematic Investment Plans), where you deposit periodically (in the form of annuity) over the whole investment period.

How to use the lumpsum return calculator?

To apply the mutual fund lumpsum calculator, the first step is to choose what you would like to compute:

  • Final balance;
  • Initial lumpsum;
  • Required period; or
  • Required rate of return.

After setting the rest of the parameters in the tool, you will immediately receive the output of the calculation:

1. Lumpsum inputs

  • Initial lumpsum - The Present Value (PV) of your investment.
  • Your goal - The Future Value (FV) of your investment.
  • Expected rate of return - Annual nominal interest rate.
  • Compounding frequency (advanced mode) - The frequency interest is added to the principal balance of your investment, or, in other words, how often the earned return or interest is reinvested. If you would like to see the power of compounding, switch to the advanced mode of this mutual fund lumpsum calculator. Here, you can check how your balance changes if you set a yearly or continuous compounding frequency.
  • Term - The length of your investment.
  • Inflation rate - The expected annual rate of inflation during the term of the investment. You can set a negative value if you expect a fall in the general price level during the set interval, representing deflationary pressures.
  • Start date - The first day of investment.

2. Results

After setting all parameters, you will immediately read the result and study all details of your investment in the summary table just below the lumpsum calculator with inflation.

3. Balances and schedules

You can also follow the progress of your lumpsum investment in a dynamic chart and payment schedule.

Lumpsum calculator disclaimer

You should consider the lumpsum calculator with inflation as a model for financial approximation. All payment figures, balances, and interest figures are estimates based on the data you provided in the specifications that are, despite our best effort, not exhaustive.

For this reason, we created the calculator for instructional purposes only. Still, if you experience a relevant drawback or encounter any inaccuracy, we are always pleased to receive helpful feedback and advice.

FAQ

What is the difference between lumpsum and SIP investment?

The difference between lumpsum and SIP investment is that while you deposit a certain single amount at the beginning of lumpsum investments, and in SIP investment, your deposit activity is spread over the whole investment term.

What would be the final balance of Rs. 1,00,000 lumpsum investment after ten years?

Of course, the answer depends prominently on the expected rate of return. Let's say, if your expected rate of return is 10%, your final balance of Rs. 1,00,000 lumpsum investment after ten years with monthly compounding will be Rs. 2,70,704.

You need to apply the following formula if you would like to compute it individually.

final balance = lumpsum deposit * (1 + rate of return/compounding frequency)periods

final balance = 1,00,000 * (1 + 0.1/12)120 = 2,70,704.15

How much is the required lumpsum investment to reach a goal of Rs. 10,00,000 in ten years?

The key factor is the value of the expected rate of return. Keeping the assumption of 10% rate of return, you should deposit Rs. 36,941 to reach the Rs. 10,00,000 in ten years.

You can use the following lumpsum formula to calculate it:

initial balance = final balance / (1 + rate of return/compounding frequency)periods

initial balance = = 1,00,000 / (1 + 0.1/12)120 = 36,940.7

Tibor Pal, PhD candidate
Lumpsum inputs
I'd like to know the...
initial lumpsum
Your goal
$
Expected rate of return
%
Term
yrs
Start date
Inflation rate
%
Results
You need to invest $36,940.70 to reach the desired balance.
Opening balance$36,940.70
Final balance$100,000.00
Total return$63,059.30
End of termDec. 9, 2031
Display...
chart of balances
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