HaatBeatHow it's calculated
V starts at the initial one-time investment. P is the first-year amount per recurring interval, s is its annual increase, k counts completed years and r is the annual return divided by 12. Deposits are added at the start of the selected interval. One-time mode has no recurring deposits.
Assumptions
- The initial amount is invested at the start, and recurring deposits arrive at the start of each selected period.
- An annual increase changes the amount per recurring deposit at the start of each new year.
- Returns compound monthly at one-twelfth of the annual rate.
- Taxes, fund charges and inflation are not included.
Worked example
Investing 25,000 rupees a month for 15 years at an assumed 12% a year could grow to about 1.26 crore rupees, of which 45 lakh is the amount invested.
Questions
Is the expected return certain?
No. Market-linked returns vary from year to year and can be negative. Try a range of rates to see how sensitive the outcome is.
Why do some calculators show a lower figure?
Some assume deposits are invested at the end of a period. Investing at the start gives each deposit more time to grow.
Can I calculate a lump sum alone?
Yes. Choose One-time only and enter the initial investment. For a lump sum plus regular contributions, choose a recurring frequency and enter both amounts.
Does this include tax or fund expenses?
No. Taxes and fund charges depend on your country and your fund, and they reduce what you receive. Enter a lower return to allow for them.