Lump-sum calculator – meaning, working, and benefits

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What is a lump sum calculator?

If you want to find returns on your lump-sum investment then the lumpsum calculator is a tool that you can utilize for this purpose. You will be able to calculate the return on your lump-sum investment very easily. In this tool, you won’t have to do any calculation manually, all you will have to do is to fill the boxes that will be solved using the inbuilt formula of this calculator. Such boxes will require details such as the amount to be invested, maturity period, and the rate of return. By just doing this, you will get the exact and accurate results in a few seconds. You won’t be putting in any extra effort and time.

What is a lump sum investment?

As you know that when you invest money, you will be usually making it through a monthly investment plan. But you will also have the option to pay the entire amount in one installment instead of investing it monthly. Investing in one let go is called a lump sum investment plan. If you are planning to invest on a long-term basis then it can be one of the best ways of making the investment. If you can afford to take high risks in an investment scheme then you can plan to make the investment in a lump sum investment plan. You will have to enter the market at the right time to make money through a lump sum investment plan. If you are looking for short-term investment plans then this lump sum scheme is not for you. You need to take care that if you are investing in a lump sum scheme then you should have excess liquid funds, otherwise, it can cause you to sell your securities at loss at the hour of need of money.

How does a lump sum calculator work?

While calculating the result of a lump sum investment scheme, this calculator uses the principle of the future value of money. If you know the rate of return that you will be getting on your investment then this calculator will tell you the future value of the money that you will be putting in a scheme. It is based on a formula and that formula is PV(1+r)^n, where FV = future value, PV = present value, r = rate of return, n = number of years. You need to know all these things to find the future value of your money.

Benefits of using this calculator?

  • You will get the future value of your money in a few seconds. If you will be doing such calculations manually then it can take a lot of time and also, it can be very confusing sometimes.
  • You will be able to find whether you will be able to achieve your financial goal through the selected investment plan or not.
  • You can also manage your finances in a better way through that calculator.

If you are looking for this calculator then you can visit 5paisa, it provides you with the option of using this calculator.