Calculate the Future Value of Your Investments

1. Two Components, One Formula

Your future value has two parts: (a) your starting lump sum compounding for the full duration, and (b) each annual addition compounding from the year you add it until the end. The combined formula:

FV = P × (1+r)ⁿ + PMT × [(1+r)ⁿ − 1] / r

The first term is your lump sum's compound growth. The second is the closed-form sum of all the annual additions and their compounded growth (ordinary annuity — additions made at year-end).

2. Why the Split Matters

The Results Summary shows the FV of your principal and the FV of your additions separately. This makes the trade-off visible: a small starting amount with consistent yearly contributions can outpace a much larger lump sum that just sits. Compounding rewards both patience and consistency.

3. Tax on Gains

This calculator applies a flat 12.5% LTCG rate to the total gain (Total FV − Total Invested). This matches India's long-term capital gains tax on equity and equity-oriented mutual funds:

Tax = (FV − Total Invested) × 12.5%

For debt funds (post-April 2023) and FDs, gains are taxed at your slab rate, typically higher. Consult a tax advisor for your specific situation.

4. Real Return Rate (Fisher Equation)

Nominal return doesn't account for inflation. The Real Return Rate shows what your purchasing power actually grew at:

Real Return = (1 + nominal) ÷ (1 + inflation) − 1

At 12% nominal and 6% inflation, real return is about 5.66%.

5. Doubling Time

How long for a lump sum to double at this rate (ignoring additions):

Doubling Time = ln(2) ÷ ln(1 + r)

At 12%, money doubles in about 6.12 years. This applies only to the lump-sum portion — your annual additions don't each have the full tenure to double, so total wealth multiplier will be lower than 2^{n/doubling time}.

Caveats & Disclaimer

Returns are illustrative. Mutual fund investments are subject to market risk; past performance does not guarantee future results. The calculator assumes a constant annual return, which differs from real-world MF performance that varies year to year. Annual additions are modelled as a single year-end contribution (ordinary annuity) — monthly SIPs would deliver slightly more due to mid-year compounding.