Mutual Fund Calculator
Investing in mutual funds can be easy, but knowing how your investments grow over the years can be difficult. In this situation, a mutual fund calculator can help you know the final value of your mutual fund investments. Let us understand how PL Capital Group – Prabhudas Lilladher’s mutual fund calculator works and its benefits.
What is a Mutual Fund Return Calculator?
A mutual fund calculator helps you estimate the worth of your mutual fund investment on its maturity. In this calculator, you must enter the details like investment tenure, expected rate of return, initial investment amount, and SIP amount. Once you enter all the details, the calculator immediately calculates your returns in a few seconds.
However, a mutual fund calculator can also work differently. For example, you can enter the target corpus you want to build after several years. The calculator will show you how much you have to save either as a lump sum or as a monthly SIP to reach that amount.
There are typically two ways to invest in mutual funds: the lump sum investment and a systematic withdrawal plan (SIP).
In a lump sum, you invest a certain amount in a mutual fund and then use a lump sum calculator to determine the interest returns after letting the money grow.
With SIP, you usually invest a specific amount of money in a disciplined manner on a predetermined date, which might be weekly or monthly.
Formula of Mutual Fund Calculator
Understanding the fundamental formula of the mutual fund calculator is crucial if you want to use it. For a lump sum investment, the formula is:
M = P × (1+R) N
In this formula:
As you can see, the tenure (N) has a multiplier impact because it is the power of the equation. More power is produced in return for the longer you hold.
For SIP, the formula is:
M = S × [[(1+R) N - 1]/ R]
In this formula,
Note that neither of the above formulae is required to be employed when using the mutual fund calculator.
How Does a Mutual Fund Investment Calculator Online Work?
Let us understand how PL Capital’s mutual fund calculator works with an example. Suppose you put a lump sum of INR 2 lakh today in a mutual fund scheme that would increase at a post-tax CAGR of 15% over ten years. In this instance, your investment will ultimately be worth INR 8.09 lakh.
The final maturity amount increases to INR 32.7 lakh if the duration is extended from 10 to 20 years, which is almost 4x of what you obtained at the end of the 10 years.
For SIP, consider a scenario in which you are investing INR 5,000 a month for 10 years with a post-tax CAGR return of 10%. After 10 years, it will have increased to INR 10.3 lakh. Once more, the calculator indicates that the terminal amount would be INR 20.8 lakh
if the duration is extended to 15 years. This is more than double the amount you had accumulated at the end of the previous 10 years.
Benefits of using PL Capital’s Mutual Fund Calculator
1. Accessibility
Whether you are managing a lump sum investment or an SIP, PL’s mutual fund calculator provides you with a user-friendly layout that makes it simple to enter your investment information.
2. Time Saving
Manually calculating possible returns can take a lot of time, particularly when compound interest and different investment periods are involved. These procedures are made simpler and time-saving by the online mutual fund calculator.
3. Accuracy
This calculator reduces mistakes compared to manual SIP or lump sum return calculations. It offers trustworthy information for sound investment decisions.
4. Scenario Analysis
To examine several investment scenarios and their possible results, you may easily change the investment parameters in the calculator. These are the amount, duration, and projected rate of return.
5. Goal Planning
A mutual fund calculator can also help you monitor your investment goals by displaying the estimated returns over time. This enables you to understand how much you should invest each month or at a time.
