Worked example
Example with the default numbers — change them above.
One-time investment: ₹5,00,000 · Assumed return (a year): 12% · Investment period: 10 yrs
₹5 L invested once becomes ₹15.53 L in 10 years at 12% a year, so your money grows 3.1 times and ₹10.53 L is returns.
| Value at the assumed return | ₹15.53 L · after 10 years |
|---|---|
| Amount invested | ₹5 L · invested once, on day one |
| Estimated returns | ₹10.53 L · 211% on top of your investment |
| Worth in today's money | ₹8.67 L · after 6% yearly inflation |
How the Lumpsum Calculator works
- Enter the amount you will invest once, the yearly return you assume and the number of years.
- Every year the whole balance is multiplied by one plus the yearly return, so the interest from earlier years also earns returns.
- After the last year, the balance is the expected value. Subtracting your investment gives the returns.
- The calculator also shows how many times your money has grown and the percent return in total.
- Dividing the expected value by the inflation you choose gives its worth in today's rupees.
Future value of a lump sum
FV = P × (1 + r) ^ t
FV = value at the end
P = amount invested once
r = yearly return as a decimal (12% is 0.12)
t = number of yearsAssumptions and limits
- The return is one steady yearly rate with no good or bad years. Yearly compounding is used, so 12% a year means exactly 12% over a year.
- Nothing is added or withdrawn after the start.
- Market returns are not fixed or guaranteed. Real investments rise and fall, so treat the result as an illustration at one steady rate, not a forecast.
- Enter returns after fund charges: a fund's published returns already have its expense ratio taken out. Exit loads and taxes on gains are not deducted, and they lower what you actually take home.
- Inflation is a steady figure you choose; the today's-money value divides the final amount by (1 + inflation) for each year.
Frequently asked questions
How do I calculate the future value of a lump sum investment?
Multiply the amount by (1 + yearly return) once for every year: FV = P × (1 + r)^t. For ₹5 lakh at 12% a year for 10 years, FV is about ₹15.5 lakh, so ₹10.5 lakh is returns. Enter your own amount, return and years above to see yours, along with the year-by-year table.
Which is better, a lump sum or a SIP?
Neither wins every time. A lump sum is fully invested from day one, so it can gain more if markets rise soon after. A SIP spreads purchases over months, which reduces the risk of investing everything at a high point and suits regular income. Compare both using the same return and period in the SIP and lumpsum calculators.
What is the difference between absolute return and CAGR?
Absolute return is the total gain as a percent of what you invested, with no mention of time. CAGR is the steady yearly rate that would produce the same result over the period. ₹5 lakh growing to ₹15.5 lakh in 10 years is an absolute return of about 211%, and a CAGR of 12%. The CAGR calculator works this out for you.
What return should I assume for a lump sum?
Nobody can know future returns, and none is guaranteed. Try a few rates, such as 8%, 10% and 12%, and plan on the lower ones. A fixed deposit, a debt fund and an equity fund have very different ranges, so use a rate that fits where the money will actually go.
How long does it take for a lump sum to double?
Divide 72 by the yearly return for a quick estimate. At 12% money doubles in about 6 years, at 8% in about 9 years. The exact time at 12% is about 6.1 years. Doubling again takes the same time, which is why a long holding period matters so much for a lump sum.
Does this lumpsum calculator include tax?
No. It shows growth before tax and costs. Tax on gains depends on the type of investment, how long you hold it and the rules at the time you sell, so the amount you keep will be lower than shown. Check the current rules for your investment, or speak to a tax professional.
Sources
Logic and rates last verified on .
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