Power of Rs 10,00,000 One-time Investment in Mutual Fund: In how much time can your lump sum investment be doubled?

Rupee cost averaging is an investment strategy where a fixed sum is invested in mutual funds at regular intervals.

It is a process in which you will earn capital gain not only on the principle amount but also on the capital gain earned earlier. Therefore, strategic investment in mutual funds can be beneficial if you are looking for investment ideas.

In this write-up, we will understand with an example how a lump-sum investment in mutual funds works. For this, let's assume you are making a one-time investment of Rs 10,00,000 in mutual funds and your goal is to double this corpus to around Rs 20,00,000. Now, can you guess how much time it will take? Let's calculate and find -

For all calculations, we are assuming an 11 per cent annualised return rate.

To create a corpus of around Rs 20,00,000 with a Rs 10,00,000 one-time investment, one needs to invest for at least 7 years in mutual funds, according to the calculations.

One can expect a total of Rs 10,76,160 (on average) as capital gains by making a one-time investment of Rs 10,00,000 in mutual funds for 7 years, which is more than what one invests.

However, it should be noted that this is an expected return, and the actual amount may vary depending on the market conditions.

Consequently, at the end of 7 years, you may get a total of Rs 20,76,160 (approx.). This includes the principal investment and capital gain.

Total Investment Amount: Rs 10,00,000 Capital Gains: Rs 10,76,160 Total Approx. Return: Rs 20,76,160