Home
Back
Future Value Formula:
| From: | To: |
The Indian Mutual Fund Calculator estimates the future value of mutual fund investments using the compound interest formula. It helps investors plan their financial goals by projecting returns based on principal amount, annual interest rate, and investment period.
The calculator uses the compound interest formula:
Where:
Explanation: The formula calculates how much your investment will grow over time with compound interest, where returns are reinvested to generate additional earnings.
Details: Calculating future value is essential for financial planning, retirement planning, and setting realistic investment goals. It helps investors understand the power of compounding and make informed investment decisions.
Tips: Enter principal amount in INR, annual interest rate as a decimal (e.g., 0.12 for 12%), and investment period in years. All values must be positive numbers.
Q1: What is compound interest?
A: Compound interest is interest calculated on the initial principal and also on the accumulated interest from previous periods, leading to exponential growth.
Q2: How accurate is this calculator for mutual funds?
A: This provides a basic estimate. Actual mutual fund returns may vary due to market fluctuations, expense ratios, and other factors.
Q3: Should I consider inflation in my calculations?
A: Yes, for long-term planning, consider real returns (nominal returns minus inflation) to understand purchasing power.
Q4: What's the difference between simple and compound interest?
A: Simple interest is calculated only on the principal amount, while compound interest is calculated on principal plus accumulated interest.
Q5: Can I use this for SIP calculations?
A: This calculator is for lump-sum investments. For Systematic Investment Plans (SIP), a different formula accounting for regular contributions is needed.