Disclaimer:
Please note that these calculators are for illustrations only and do not represent actual returns. Mutual Funds do not have a fixed rate of return and it is not possible to predict the rate of return.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
What is a Mutual Fund Calculator?
Mutual fund calculators are online tools that can assist you in calculating the returns and future values of your investment in the fund. It takes into account several factors, such as - the initial amount of investment, expected rate of returns, tenure of the investment, and frequency of the contributions.
However, a mutual fund calculator is only an illustration of the investment's growth over time, not the exact return of the investment.
How Does a Mutual Fund Calculator Help You?
The modern-day online mutual fund calculators offered to you by Mutual Funds Sahi Hai can help you in various ways, and some of the primary ways it can assist you are:
1. It Helps the Investor Decide Investment Variables: An investor can decide the investment variables such as tenure of the investment, expected returns, and initial investment amount based on the estimation the calculator provides to them.
2. It Assists to Plan Future Strategies: You can plan your future financial strategies according to the estimated returns from the calculator.
How Does a Mutual Fund Calculator Work?
Mutual fund calculators use a simple algorithm to estimate the investment's returns according to the variables you enter into the calculator.
It is an easy-to-use tool and frees an investor from having to do the math manually.
There are two paths an investor can invest in mutual funds: SIPs and lump sum. This calculator enables the investor to check the estimated future value of both kinds of investments.
But, for this calculator to provide you the estimations, you will have to enter three data points, namely;
- Investment Amount
- Duration of Investment
- Estimated Rate of Return
The formula used by the mutual fund calculator is:
a) For Lump Sum or One-Time Investments -
Future Value = Present Value (1 + r/100)^n
r = Estimated rate of return
n = Duration of the investment
b) For SIPs -
FV = P [(1+i)^n-1]*(1+i)/i
FV = Future Value
P = Principal amount you invest through SIP
i = Compounded rate of return
n = Investment duration in months
r = Expected rate of return
How to Use the Mutual Fund Calculator?
The steps to use this mutual fund returns calculator are as follows:
Step 1: Enter your investment amount and nature of investment (SIP or Lumpsum.)
Step 2: Choose the tenure of your investment.
Step 3: Provide the estimated rate of return.
Benefits of Using the Mutual Fund Calculator
The mutual fund's returns calculator is an essential tool and can benefit investors in the following ways:
1. Witness the Power of Compounding: By staying invested for a longer period, you can maximize your returns. Use a mutual fund calculator to estimate how much you can earn on your original investment and accumulated interest over time
2. Compare SIP or Lumpsum Investments: You can calculate returns through SIPs and through lump sums. This can further enable you to determine whether to invest through SIPs or Lumpsum.
3. Avoid Errors of Manual Calculations: The typical errors arising from manual calculation methods or human error can be avoided by the utilization of the calculator.
4. Assist Futuristic Strategy Plans for Investment: It will help you plan strategies for the future based on the estimations.
FAQs
Q1. What is a mutual fund calculator?
Mutual fund calculators are online tools that can calculate estimated returns for you with some minimal data points such as - investment amount, tenure, and rate of interest.
Q2. Will the estimated returns provided by the mutual fund returns calculator change from the actual returns?
The calculator is just an illustration and does not give any estimations from the actual returns.
Q3. How long does the mutual fund calculator take to provide the estimated returns?
You can see the estimate presented almost instantly after you provide the details (investment amount, tenure, and rate of return.