Lumpsum Calculator

How to use Lumpsum Calculator

1. Enter the one-time amount you plan to invest.
2. Enter the annual return you are assuming and the number of years. The prefilled return is only an illustration.
3. Tick the inflation box and enter an assumed inflation rate if you want the value in today’s purchasing power.
4. Read the future value, absolute and annualised gain, and the year-wise table.

The formula behind a lumpsum

A one-time investment grows by compounding. The future value is FV = P x (1 + r)^t, where P is the amount invested, r is the expected annual return as a decimal and t is the number of years. The absolute gain is FV minus P, the absolute return is the gain divided by P, and the annualised return is the rate r you used, because compounding at a constant rate is the definition of CAGR.

To see the effect of inflation, the tool divides the future value by (1 + i)^t, where i is your assumed inflation. The real annual return is (1 + r) / (1 + i) - 1, which is a little less than the simple difference r - i.

Worked example

Invest 100,000 for 10 years at an assumed 12 percent a year. The future value is 100,000 x 1.12^10 = 310,584.82, a gain of 210,584.82 or an absolute return of 210.58 percent. If inflation averages 6 percent, that future amount is worth 310,584.82 / 1.06^10 = 173,428.94 in today’s money, and the real annual return is 1.12 / 1.06 - 1 = 5.66 percent. So the investment still grows your purchasing power, but not by as much as the headline number suggests.

Tips, limits and privacy

Lumpsum investing puts all your money to work at once, which gives it the longest time to compound but also exposes it to the market level on that single day. Many people compare it with spreading the same amount through a monthly plan; the step-up SIP calculator on this site can help with that comparison.

• Returns and inflation are assumptions you enter, not forecasts.
• Negative returns down to -50 percent can be entered to test a bad scenario.
• Taxes and charges are not included.
• This is an estimate only and not financial advice.
• All maths happens in your browser and nothing is stored or uploaded.

Why use this lumpsum calculator tool

• Absolute and annualised gain. Shows the total rupee or dollar gain, the total percentage return and the annualised rate side by side.
• Inflation-adjusted view. Converts the future amount into today’s money and shows the real annual return after inflation.
• Decimal years allowed. Enter 2.5 years or 7.25 years and the tool compounds for exactly that period.
• Year-by-year table. Value, gain and (optionally) inflation-adjusted value at the end of each year.

Frequently asked questions

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