What is lumpsum investment calculator?

An lumpsum investment calculator is a tool that helps you determine the amount of interest that will or will be payable on a financial transaction based on the principal amount, the interest rate and the time period involved. It is commonly used in personal finance and investment planning to estimate the growth of savings, loans, mortgages, or other financial instruments.

Typically, an lumpsum investment calculator requires the following inputs:

Principal Amount: The initial amount of money or the amount outstanding on the loan.
Interest Rate: Annual Percentage Rate (APR) or the rate at which interest is charged or earned.
Time Period: The period of time, usually in years, for which interest is calculated or paid.

Based on these inputs, the calculator can provide the following information:

Simple Interest (Interest amount): The total interest earned or owed over a given period of time using a simple interest calculation.
Compound Interest (Interest amount): The total interest earned or owed over a given time period using compound interest, which takes into account the accumulated interest from previous periods.
Total Amount: Final amount after adding principal and interest.

Simple interest:

A simple interest calculator is a tool that helps calculate the interest earned on a principal amount over a specific period of time, using the formula I = P * r * t, where I is the interest, P is the principal amount, r is the interest rate, and t is the time period. Simple interest is calculated based only on the principal amount, without taking into account any interest earned on previously accumulated interest.

To calculate a simple interest by interest rate calculator, you typically need to enter the principal amount, the interest rate, the time period for which you want to calculate the interest, and compounding frequency as a simple interest. And click on calculate button. The calculator will then use the simple interest formula to calculate the interest earned on the principal amount over the specified time period.

Compound interest:

A fixed deposit or compound interest calculator is a tool that helps calculate the interest earned on a fixed deposit or savings account over a specific period of time, taking into account the effect of compounding. Compounding is the process of adding the interest earned to the principal amount, so that interest is earned on both the principal and the accumulated interest.

To use a interest rate calculator, you typically need to enter the principal amount, the interest rate, the compounding frequency, and the time period for which you want to calculate the interest. The calculator will then use the compound interest formula to calculate the total amount earned, including the principal and accumulated interest, over the specified time period.

Compound interest formula is, CA=P(1+r/(n*100))^n*t

Where, CA=compound amount, P=principal amount, r= interest rate yearly in %, t= time period in years, n= compounding frequency, for a year compounding n=1, for monthly n=12, for quarterly n=4 etc.

Interest rate calculators can be found online at soved.in website. They are helpful for individuals and businesses to estimate the financial impact of different interest rates and time frames, allowing them to make informed decisions in various financial matters.

Lumpsum investment calculator:

How to calculate Interest by above calculator?

There are 4 input fields and 2 buttons, we will discuss about the input fields and buttons step by step below-

Principal amount:

In this field, enter the starting amount for which the interest is to be calculated.

Interest rate (Yrly-%):

In this field, enter the annual or yearly interest rate in percentage.

Time in years and time in months:

In this field, enter the ‘time in years’ in ‘time in years input field’ or enter ‘time in months’ in ‘time in months input field’, or input time in years and months in both input field. If time is available in days then you have to convert in years and input it on time in years input fields.

Compounding frequency:

There are six compounding frequency radio buttons, in which frequency you want to compounding, you have to click on the round button in front of that compounding frequency.

Calculate:

After inputting all the fields, click on the Calculate button and get the result in total amount and interest amount.

Reset:

After calculation if you want to calculate again then you just have to click on reset button and you can get blank input field. You can easily change the input field if you don’t want to reset.

How to calculate interest by theoretically?

We will understand the calculation of interest for any deposit by example-

Example- Suppose Mr. A 100000/- rupees invested for 3years 11months and 20days at the annual interest rate of 8% so calculate interest and total amount with the compounding frequency of monthly, quarterly, thrice yearly, half yearly, yearly, and simple interest.

Answer-

Principal amount, P= 100000/-

Annual interest rate, r= 8%

Time in years, t= 3 + 11/12 + 20/365

Time in years, t= 3 + 0.9166 + 0.0548= 3.9646

Simple interest,

Simple interest, I= P*r*t/100

Simple interest= 100000*8*3.9646/100= 31716.8/-

So, Total amount= Principal amount + simple interest

Total amount= 100000 + 31716.8= 131716.8/-

Compound interest,

Total amount, A= P*(1+r/(n*100))^^n*t

For monthly compounding,

n= total months in a year/ months in a monthly= 12/1= 12

Total amount= 100000*(1+8/(12*100))^^12*3.9646 = 100000*(1.0066666)^^47.5752 = 100000*1.37178= 137178/-