Mutual Funds Returns Calculator
Calculate potential returns on your mutual fund investments based on initial investment, periodic contributions, expected returns, and investment period. Compare lump sum vs. SIP investment strategies.
How to Use This Calculator
- Enter your initial investment amount (one-time investment)
- Enter your monthly contribution amount (SIP)
- Specify the investment period in years
- Enter your expected annual return rate
- Select your investment type (SIP, Lump Sum, or Both)
- Adjust the inflation rate slider if you want to see real returns
- Click Calculate Returns to see your investment growth and returns
Formula Used
Lump Sum: FV = P(1+r)^n
SIP: FV = PMT × [((1+r)^n - 1)/r] × (1+r)
Real Return = [(1+Nominal Return)/(1+Inflation Rate)] - 1
Where:
- FV = Future Value of investment
- P = Principal or initial investment
- PMT = Periodic payment (monthly contribution)
- r = Rate of return per period (monthly rate = annual rate/12)
- n = Number of periods (months)
Example Calculation
Real-World Scenario:
Rahul wants to invest in a mutual fund for his retirement. He decides to start with an initial investment of ₹50,000 and contribute ₹5,000 every month for 15 years. He expects an annual return of 12% from his equity mutual fund.
Given:
- Initial Investment = ₹50,000
- Monthly Contribution = ₹5,000
- Investment Period = 15 years (180 months)
- Expected Annual Return = 12%
- Monthly Rate = 12%/12 = 1% or 0.01
Calculation:
Future Value of Initial Investment = ₹50,000 × (1+0.12)^15 = ₹274,848
Future Value of SIP = ₹5,000 × [((1+0.01)^180 - 1)/0.01] × (1+0.01) = ₹2,509,560
Total Future Value = ₹274,848 + ₹2,509,560 = ₹2,784,408
Total Investment = ₹50,000 + (₹5,000 × 180) = ₹950,000
Total Returns = ₹2,784,408 - ₹950,000 = ₹1,834,408
Result: Rahul's investment of ₹950,000 will grow to ₹2,784,408 in 15 years, generating total returns of ₹1,834,408 (193% return).
Why This Calculation Matters
Practical Applications
- Planning for retirement goals
- Estimating wealth creation for financial goals
- Comparing different investment strategies
- Understanding the power of compounding
- Evaluating real returns after inflation
Key Benefits
- Helps set realistic financial goals
- Enables better investment planning
- Shows impact of regular investing (SIP)
- Demonstrates power of long-term investing
- Provides insights for asset allocation
Common Mistakes & Tips
Frequently Asked Questions
References & Disclaimer
Financial Disclaimer
This calculator is for educational purposes only. Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully before investing. The calculations provided are estimates based on the inputs provided and should not be considered as financial advice. Past performance does not guarantee future results.
References
- Association of Mutual Funds in India (AMFI) - Industry body for mutual funds in India
- Securities and Exchange Board of India (SEBI) - Regulatory body for securities markets in India
- Reserve Bank of India (RBI) - Central banking institution of India
Accuracy Notice
This calculator assumes constant rate of return and does not account for market volatility, taxes, or fund management expenses. Actual returns may vary significantly. The inflation-adjusted returns are approximate and may not reflect actual purchasing power changes. Consult with a qualified financial advisor before making investment decisions.
About the Author
Kumaravel Madhavan
Web developer and data researcher creating accurate, easy-to-use calculators across health, finance, education, and construction and more. Works with subject-matter experts to ensure formulas meet trusted standards like WHO, NIH, and ISO.