Explanation

A mutual fund is a collection of money that is professionally managed by a fund manager🧐. It is a 'trust' that collects money from a group of individuals with similar financial goals and invests it in stocks, bonds, money market instruments, and/or other securities as per the mutual fund scheme's mandate.💰

If you want to invest a lump sum in a mutual fund, you need to know your future accumulated amount based on the expected returns for the entire period. Suppose you invest ₹100 in a mutual fund assuming an annual return of 12%. You intend to invest for five years. What can you expect at the end of five years? ₹176.23. How did we get it a jiffy?🤔

Let us now decode the magic compound interest formula ✨ used in the mutual fund investment calculator here. We are not taking the gains out of the fund at the end of each year. They remain in the fund and compound year after year. So at the end of the first year, as per the compound interest formula, your accumulation will be equal to 100*1.12.

At the beginning of second year, now your P = 100*1.12, so accumulation at the end of second year will be 100*1.12*1.12 that is, 100(1.12)^2

And this process continues for n years. Hence, we get the formula as:🥳

A = P(1+i)^n

How Our Calculator Can Help You?

a) Calculate mutual fund returns that you have intvested in.
b) Determine the investment amount to reach financial goals.
c) Compare returns from various types of mutual funds in India.
d) Learn about how much your lumpsum investment can accumulate to at assumed rate.