Calculate Mutual Fund Investment Returns

Mutual Fund Return Calculator

What is a Mutual Fund Return calculator?

The mutual fund calculator is a simulation that helps you to calculate the returns from the mutual fund investments. You can calculate the maturity value of an investment if you invest a lump sum amount or even through the SIP route.

A mutual fund calculator is an easy to use tool that helps you to get an idea of the maturity value of the mutual fund investment, even before you invest the money. It allows you to budget for expenses and achieve your financial goals, as you already know the amount of money you will get at maturity.

You can enter the SIP amount, duration of the SIP, and the frequency of the SIP to calculate the maturity amount for an estimated rate of return on the investment.

The mutual fund calculator has a formula box where you select the nature of the investment. It can be a lump sum investment or a SIP investment. You select the amount of investment, rate of return and the duration of the investment to get the maturity amount.

If the nature of the investment is a SIP, you select the SIP amount, frequency, time of the investment, and the expected rate of return. The mutual fund calculator shows you the value of the investment at maturity.

How to use the ClearTax Mutual Fund Calculator?

Use the ClearTax Mutual Fund Calculator based on the nature of your investment.

Lump-Sum investment:

You must select the One-Time Investment (Lump Sum) option in the ClearTax Mutual Fund Calculator. You then fill in the amount of investment, expected rate of return and the duration of the investment. The ClearTax Mutual Fund Calculator shows you the value of the investment at maturity. SIP investment:

You must select the SIP option in the ClearTax Mutual Fund Calculator. You then fill in the amount of investment, frequency of the SIP and the duration of the SIP. The ClearTax Mutual Fund Calculator shows you the value of your investment at maturity

How does a mutual fund calculator help you?

  • A mutual fund calculator provides you with the estimated returns for the investment tenure, be it 1-year, 3-years, etc.

  • It is a free tool that is available to investors. It is quite convenient to use and even a layperson can use it with relative ease.

  • A mutual fund calculator helps investors plan and manage their finances better once they have an estimated idea of the future value of their investments.

  • It offers reasonably accurate returns on your mutual fund investments. However, one should note that as mutual fund investments are subject to market risks, one cannot predict the returns with pinpoint accuracy.

The formula of calculating returns via mutual fund return calculator

SIP calculator An SIP calculator works on the following formula:

FV = (P * ((returns / 100) / 12)) / (Math.pow((1 + ((returns / 100) / 12)), (year * 12)) - 1);

Here,

FV = Future value of the investment

P = SIP investment amount

Let’s understand this with the help of an example:

Megha wants to invest Rs1,000 per month for 12 months. The expected rate of interest on this investment is 12% pa (per annum). Thus, the future value of her investments (M) would be:

M = 1,000 X ({[1 + 12%]12 – 1} / 12%) x (1 + 12%)

Therefore, M = Rs25,293 (approx)

Instead of having to compute complex calculations, Megha can simply use a mutual fund return calculator to save time and effort.

N.B.: The rate of interest on an SIP investment will differ as per market conditions and may increase or decrease.

  1. Lumpsum calculator A lumpsum calculator works on the following formula:

A = P (1 + r/n) ^ nt

Here,

A = estimated returns

P = Present value of investment

r = estimated rate of return

t = tenure

n = number of compound interests in a year

Let’s understand this with the help of an example.

Sonia makes a lumpsum investment of Rs20 lakh in a mutual fund that offers average returns at the rate of 12% pa. The duration for her investment is 5 years that compounds every 6 months.

Here,

P = 20,00,000

r = 12/100

t = 5

n = 2

Therefore, the estimated future returns, in this case, would be:

A = 20,00,000 (1 + 12/1002) ^ 25

A = Rs35,81,695 (approx)

Instead of having to make complex calculations, Sonia can simply use a lumpsum calculator to save time and effort.

How is mutual fund return calculated?

FV = Future value or the amount you get at maturity. For example, you invest Rs 1,000 a month in a mutual fund scheme using the systematic investment plan or SIP route. The investment is for 10 years, with an estimated rate of return of 8% per year. You have i = r/100/12 = 8/100/12 = 0.006667.

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