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How does a mutual fund calculator work?

The mutual fund calculator helps you in evaluating returns from a mutual fund investment. The calculator works on the painless inputs an investor gives like investment amount, expected rate of return, investment period, and step-up rate. The online mutual fund calculator will instinctively calculate the maturity amount and wealth obtained for mutual fund investments.

This calculator helps in evaluating the maturity value of an investment if invested through a monthly Systematic Investment Plan mode or lumpsum mode. A mutual fund calculator evaluates the returns in terms of maturity amount, wealth gained and compares the performance with Long Term Wealth Fund. Therefore, you can calculate both lump sum and Systematic investment returns using this mutual fund calculator.

It is vital to note that this calculator only evaluates the returns based on the inputs provided or the data given. The mutual fund calculator doesn’t guarantee any returns. Thus, the returns from any mutual fund investment depend on the performance of the fund. Moreover, the actual return from the mutual fund investment can be higher or lower than the amount assessed by the calculator. You can track this through the mutual fund tracker app.

How To Use a Mutual Fund Calculator?

Every investor is eager to estimate their probable or prospective returns while investing. While estimating returns the calculator ensures investors know whether the chosen investment will help them to realise their financial goals or not. The mutual fund calculator is available online on the websites. It helps an investor to estimate the potential returns from the investment at the end of their investment tenure. This calculator estimates the wealth and maturity amount through two ways that are – the monthly Systematic Investment Plan mode and lump sum mode.

For 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 10% per annum. You can calculate the future value of the investment using the formula:

Future Value = Present Value (1 + r/100)^n

Present Value (PV) = Rs 1,00,000

r = Estimated rate of return of 10% = 10/100 = 0.10

n = Duration of the investment which is 10 years.

An investor has to calculate the Future Value (FV) of the mutual fund investment at maturity or after 10 years.

FV = 1,00,000 (1+10/100)^10

FV = Rs 2,59,374.20

So, the future value of the mutual fund investment after 10 years at an estimated return of 10% is Rs 2,59,374.20

How can a Mutual Fund Returns Calculator online help an investor?

There are different types of mutual fund returns with which an investor should be friendly, and these are – absolute return, annualised return, total return, trailing return, point-to-point return, and rolling return. However, it may become confusing for a prospective investor to keep so many aspects in mind, so there comes the role of a mutual fund calculator online which can be enormously helpful.

  • It provides an investor with the full estimation for any investment periods.
  • It also permits an investor to do future financial planning based on the estimated returns. An investor does not need to be a subject expert to be able to use this calculator.
  • It is very simple to use and also the person who has not used it before will not find any technicalities or any kind of challenges to navigate it.

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