What is a Mutual Fund?
A mutual fund pools money from many investors to invest in a diversified portfolio of stocks, bonds, or other securities. It is managed by professional fund managers and provides easy access to market investments.
How It Works
You invest regularly through SIPs or in lump sum. The fund uses this money to buy securities. Your investment grows based on returns generated from the underlying assets. Reinvestment of returns leads to compounding growth over time.
Calculation Formula
Future Value = P x [(1 + r)^n - 1] / r x (1 + r) Where: P = Monthly Investment, r = Monthly Interest Rate, n = Number of Months
Benefits of Mutual Fund Investments
- Professional management of funds
- Power of compounding returns
- Ideal for long-term wealth creation
- Flexibility with SIP and lumpsum modes
Frequently Asked Questions (FAQs)
What is a mutual fund calculator?
It helps estimate how much your mutual fund investment could grow over time, considering monthly investment, interest rate, and duration.
How does SIP work in mutual funds?
You invest a fixed amount every month in a mutual fund, and it compounds over time to build wealth.
Can I use this calculator for lumpsum investments?
Yes, you can calculate both SIP and lumpsum investment returns based on your input.