How are Lumpsum investment returns calculated?
A Lumpsum plan calculator works on the following formula –
M = P × ({[1 + i]^n – 1} / i) × (1 + i).
In the above formula –
M is the amount you receive upon maturity.
P is the amount you invest at regular intervals.
n is the number of payments you have made.
i is the periodic rate of interest.
Take, for example, you want to invest Rs. 1,000 per month for 12 months at a periodic rate of interest of 12%.
Then the monthly rate of return will be 12%/12 = 1/100=0.01
Hence, M = 1,000X ({[1 +0.01 ]^{12} – 1} / 0.01) x (1 + 0.01)
Which gives Rs 12,809 Rs approximately in a year.
The rate of interest on a Lumpsum will differ as per market conditions. It may increase or decrease, which will change the estimated returns.
What are the Benefits of the Bajaj Broking’s Lumpsum Calculator?
A lumpsum investment calculator can be beneficial to long-term investors in many ways. The top advantages include:
- Ease of Use: A lumpsum calculator is easy to use even for beginners. It requires only three simple details, all of which the investor can readily choose based on their investment plan.
- Instant Calculation: When you use a lumpsum calculator, you can view the estimated returns within seconds. This facilitates faster decision-making.
- Better Financial Planning: You can use a lumpsum calculator to plan your investments better and select the ideal investment amount and tenure to obtain the returns you expect.