How this calculator works
A lumpsum starts compounding straight away; a monthly plan puts the same total amount to work gradually.
- Step 1Invest once₹5 lakhat the start of the period
- Step 2Compound monthly1%using the selected return convention
- Step 3Estimate the end value₹16.5 lakhincluding about ₹11.5 lakh of assumed growth
Same total money, different timing
- Lumpsum at the start₹5 lakh once₹16.5 lakhThe entire amount is exposed to the assumed return for the full period.
- Same amount in a SIPEqual monthly amounts₹9.68 lakh₹5 lakh spread across 120 monthly contributions, invested at the start of each month.
- SIP at month end₹9.58 lakhEach monthly contribution starts growing a month later.
The result moves with the assumption
Worked example
- Nominal monthly rate
i = R ÷ 12- Future value
FV = P × (1 + i)ⁿ- Value in today’s rupees
FV ÷ (1 + inflation)ʸᵉᵃʳˢ
- Pone-time amount ₹5,00,000
- imonthly rate 1%
- nnumber of months 120
- Monthly rate12% ÷ 121%
- Growth factor(1 + i)ⁿ3.3004
- Estimated future value₹5 lakh × growth factor₹16,50,193
- Assumed growthfuture value − amount invested₹11,50,193
- Value after 6% annual inflationfuture value ÷ (1 + 6%)¹⁰₹9,21,459
The estimate treats the rate as constant and compounds it monthly. The effective convention instead chooses a monthly rate that compounds to exactly the entered annual rate. The compound interest calculator covers yearly, quarterly and other compounding.
Reading the result
- An assumption, not a forecastThe return is chosen by you; actual returns vary and can be lower.
- Future and today’s rupeesInflation-adjusted value helps compare purchasing power; it is a separate estimate.
- No market pathThe calculation does not model ups and downs or the order of returns.
- No taxes or chargesTaxes, exit loads, stamp duty and transaction charges are not deducted.
- Amount invested
- Assumed growth
A future sum buys less than the same rupees today; the inflation calculator shows how much less. To plan monthly investing instead, use the SIP calculator, or set both side by side in the SIP vs lumpsum calculator.
Assumptions and limits
- Constant returnOne rate every month; real markets rise and fall.
- Before taxCapital gains tax is not deducted.
- No chargesExit loads, stamp duty and fees are left out.
- Whole yearsThe money stays invested for the full period.
Putting a large amount in at once also means it all meets the market at one moment. A constant-rate estimate cannot show that risk, so treat the figure as one possible outcome.
Common mistakes
Mistake: Treating the assumed return as a promise.
Instead: Try several rates and remember that actual returns can vary.
Mistake: Comparing plans with different total contributions.
Instead: This comparison keeps the total amount invested equal.
Mistake: Reading future rupees as today’s buying power.
Instead: Use the inflation-adjusted figure as a separate estimate.
Mistake: Assuming a smooth return matches market experience.
Instead: Real returns move over time; this formula does not simulate that path.
The comparison is educational and does not recommend investing a lump sum or using a SIP. Consider your circumstances and consult a qualified professional before making financial decisions.
Checking the method
A separate Python script recomputes every test value twice, by formula and month by month, in 50-digit arithmetic.
Both must agree to half a paisa. Read how we test our calculators, or browse more money calculators.