Lumpsum formula
Future value = P × (1 + r)n
P is the amount you invest once, r is the yearly return (12% = 0.12) and n is the number of years. The gain is the future value minus P.
Why look at "today's money"?
Prices rise every year. A goal that costs ₹10 lakh today may cost ₹18 lakh in 10 years at 6% inflation. Dividing the future value by inflation shows what your money will really buy, which is the number that matters for planning.
When a lumpsum makes sense
- You received a bonus, maturity amount or property sale money and the goal is 5+ years away.
- For equity funds, many investors use an STP to move the money in over 6 to 12 months and reduce the risk of investing just before a fall.
- For goals under 3 years, debt or hybrid funds are usually more suitable than equity.
Planning to invest monthly instead? Use the SIP calculator or compare everything with the SIP vs lumpsum calculator.
Frequently asked questions
What will ₹1 lakh become in 10 years?
At an assumed 12% a year, ₹1 lakh grows to about ₹3.1 lakh in 10 years. At 10% it becomes about ₹2.6 lakh. Mutual fund returns are not guaranteed.
Is lumpsum better than SIP?
If markets rose steadily, lumpsum would win because all the money is invested from day one. Real markets go up and down, so SIP or STP spreads the risk of investing just before a fall. Compare all three with the SIP vs lumpsum calculator.
What is 'value in today's money'?
It is the future value divided by inflation over the same years. If inflation is 6%, ₹3.1 lakh in 10 years buys roughly what ₹1.7 lakh buys today.
Why does this differ slightly from some other calculators?
This calculator compounds the yearly return exactly, so 12% a year means 12% a year. Some calculators divide the yearly rate by 12 and compound monthly, which quietly gives about 12.7% a year.