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Lump Sum Return Formula:
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Lump sum return calculation measures the percentage gain or loss on a single investment over a specific period. It's commonly used for mutual funds, stocks, and other investment vehicles where a one-time investment is made.
The calculator uses the simple return formula:
Where:
Explanation: This formula calculates the simple percentage return by comparing the ending value to the beginning value of the investment.
Details: Calculating investment returns helps investors assess performance, compare different investment options, and make informed decisions about their portfolio strategy.
Tips: Enter the initial investment amount and final value in any currency. Both values must be positive numbers, with initial investment greater than zero.
Q1: What is the difference between lump sum and SIP returns?
A: Lump sum calculates return on a single investment, while SIP (Systematic Investment Plan) calculates returns on regular periodic investments.
Q2: Does this calculation include dividends and distributions?
A: The final value should include all dividends, capital gains, and distributions received to get an accurate total return calculation.
Q3: How does this differ from annualized return?
A: This calculates total return over the entire period. Annualized return accounts for the compounding effect over multiple years.
Q4: What is considered a good return for mutual funds?
A: Good returns vary by market conditions and fund type, but generally 8-12% annual return is considered good for equity mutual funds over the long term.
Q5: Should I consider inflation in my return calculations?
A: For real return assessment, subtract inflation rate from your nominal return to understand your actual purchasing power growth.