What is a Mutual Fund?
A Mutual Fund is a professionally managed investment scheme run by an asset management company (AMC). The AMC collects the money from investors and invest it in Equity, Bonds, money market instruments, and other types of investment option on their behalf. The AMC charge a fees for these services. Investors get specific number of NAV (units) proportionate to the invested amount in the fund. The loss, income/ gain of this mutual fund scheme share by the each investor according to their investment proportion.
What is an Mutual Fund Calculator?
Mutual fund Returns calculator is an online tool that helps you to calculate the returns from a mutual fund investment. Whether the investment is a lump sum or an SIP route, the returns can be easily calculated using a mutual fund calculator.
By inputting investment amount, interest rate, and tenure, Mutual Fund calculator forecasts potential returns, enabling you to plan finances and reach financial goals. For SIP investments, details required include SIP amount, investment duration, SIP frequency, and estimated rate of return. For lump sum investments, inputs needed are total investment amount, expected rate of return, and investment duration, providing a clear picture of the final maturity amount.
How does a Mutual Fund Total Return Calculator Work?
The Mutual Fund Return Calculator uses the future value formula to provide accurate estimate of the maturity value of your investment. Here are calculation examples for both the investment strategies.
| One-Time lump sum Investment Calculation | SIP Investment Calculation |
| Example: You have invested a lump-sum amount of Rs 1 lakh in a mutual fund scheme for 10 years. You have estimated the rate of return on the investment at 8% per annum. You can calculate the future value of the investment using the formula: | 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. |
| Future Value (FV) = Present Value (1 + r/100)^nPresent Value (PV) = Rs 1,00,000r = Estimated rate of return of 8% = 8/100 = 0.08n = Duration of the investment which is 10 years. | Future Value= P [(1+i)^n-1]*(1+i)/iP = Amount you invest through SIPi = Compounded rate of returnn= Investment duration in monthsr = Expected rate of return |
| You have to calculate the Future Value (FV) of the mutual fund investment at maturity or after 10 years.FV = 1,00,000 (1+8/100)^10FV =Rs 2,15,892.5. | You have i = r/100/12 = 8/100/12 = 0.006667. (You must convert the rate of return to the monthly figure through dividing by 12). You also have n = 10 years or 120 months.FV = 1,000 [(1+0.006667)^120 – 1] * (1+ 0.006667)/0.006667FV =Rs 1,84,170. |
How can Online Mutual Fund Calculator Help you?
Before you invest in a mutual fund scheme, it is a good practice to assess your return on investment. For doing so, a mutual fund calculator is the best tool as it is simple and easy to operate. Even if you are using it for the first time, you will not encounter any troubles. Check out how it helps you.
- A MF calculator will provide you with the total estimated return for 1, 3 and 5-year investment horizons.
- It assists you in planning your future financial strategy based on the estimated returns.
