What Is MF Lumpsum Calculator?

Key inputs required in a lumpsum calculator

A typical mutual fund lumpsum calculator will give output online based on some key inputs given. Here are the key inputs that you need to provide to help the lumpsum calculator to do its job in a jiffy.

• You must clearly define the amount of initial investment in rupee terms. This will be the starting point for your lumpsum calculator


• The period for which you are willing and in a position to stay invested in that particular mutual fund. You can mention that in number of years.


• The expected rate of return in terms of compounded annual returns that the investor expects. You can use last 5 year returns as reference point.


• In the case of non-mutual fund assets like bonds, you can also input the frequency of compounding. It makes a difference as we shall see.

How the lumpsum calculator actually calculates the final corpus?

Lumpsum calculators use the basic compounding formula as under:

Final Corpus = {(Upfront Investment) X (1 + rate per compounding)} ^ total compounding

Now, you may wonder as to why the number of compounding or frequency of compounding is so important. You will be surprised but it does make a difference to the eventual corpus into which your upfront investment grows. That is what is displayed by the lumpsum calculator. Check out the tabulation of results for different compounding frequencies.

We assume an investment upfront of Rs.10,00,000 for a period of 5 years. The rate of return is at 12% annually. Let us see the corpus under different compounding scenarios.

As you can see in the above table, the lumpsum calculator clearly brings out that even as you keep your investment, return and tenure same but change the frequency of compounding, there is a substantial difference to your eventual wealth created. That is eloquently brought out by the lumpsum calculator.