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Power of Rs 35,00,000 One-time Investment in Mutual Fund: In how much time can your lump sum investment generate Rs 7.46 crore corpus?
- Written by Priya Vishwakarma
Published: Zee Business| Updated: Zee Business
Power of Rs 35,00,000 One-time Investment in Mutual Funds: A well-planned investment approach can help you meet major life goals – such as buying a home, funding your children's higher education, or preparing for retirement. Since there are many options available in the market, people often get confused. However, a strategic research can help them. One of the investment options that might help is mutual funds. They are an asset class that invests money in various assets like stocks, equities and bonds on behalf of investors.
Benefits of investing in mutual funds
There are several benefits of investing in mutual funds, which include the following:
- Compounding benefits
- Diversification
- Rupee cost averaging
- Liquidity
In this write-up, we would explain how your investments can grow significantly when you stay invested for the long term.
Image Sources: Getty Images
(Disclaimer: Our calculations are projections and not investment advice. Do your own due diligence or consult an expert for financial planning.)
1/9
What is the power of compounding?
1/9Compounding is a process in which you earn interest on the interest earned. The power of compounding creates a snowball effect that helps your investments grow exponentially over time.
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Time is the key
2/9The longer the SIP duration, the greater the compounding benefits.
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Power of Rs 35,00,000 One-time Investment in Mutual Funds
3/9Let's assume you're investing a lump sum of Rs 35,00,000 in mutual funds and want to build a corpus of over Rs 7.46 crore. Now, can you estimate how long it will take? Let's do the math and find out:
4/9
One-time Investment in Mutual Funds: Assuming a 12% annualised return
4/9For all the calculations, we are assuming a 12 per cent annualised return rate.
5/9
How many years will it take to create a Rs 7.46 crore corpus?
5/9As per calculations, to create a corpus of over Rs 7.46 crore with a lump sum investment of Rs 35,00,000, you need to invest in mutual funds for at least 27 years.
6/9
Calculating average capital gain
6/9Over 27 years, you can expect to receive a total capital gain of Rs 7,11,37,083 on average.
7/9
Actual amount may vary
7/9It should be noted that this is an expected return, and the actual amount may vary depending on the market conditions.
8/9
What will Rs 30 lakh become in 27 years in mutual fund?
8/9Consequently, at the end of 27 years, including the principal investment and capital gain, you will get a total of Rs 7,46,37,083.
9/9
Full Calculation Summary
9/9Total Investment Amount: Rs 35,00,000 Capital Gains: Rs 7,11,37,083 Total Approx. Return: Rs 7,46,37,083
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