Lumpsum Investment Calculator

What is Lumpsum Investing?

Lumpsum investing means putting a large amount of money into an investment all at once, as opposed to spreading it out over time (dollar-cost averaging or SIP).

The Compound Interest Formula

A = P × (1 + r/n)^(n×t)

Where: A = Final amount, P = Principal, r = Annual rate, n = Compounds per year, t = Years

Rule of 72

A quick way to estimate how long it takes to double your money: divide 72 by the annual return rate. For example, at 12% return, money doubles in approximately 6 years.

Lumpsum vs SIP

• Lumpsum: Better in consistently rising markets
• SIP: Averages out volatility, reduces timing risk
• Statistically, lumpsum outperforms about 2/3 of the time
• SIP provides psychological comfort and discipline

Key Considerations

• Market timing: Hard to time perfectly
• Volatility: Short-term fluctuations can be significant
• Time horizon: Longer is generally better
• Risk tolerance: Can you handle seeing losses?

When Lumpsum Makes Sense

• You have a windfall (inheritance, bonus, asset sale)
• You have a long time horizon (10+ years)
• You can tolerate short-term volatility
• Markets are at fair valuations or below