The model is deliberately simple: apply the assumed annual return once a year to the running balance. That's A = P × (1 + r)ⁿ — principal P, annual rate r as a decimal, tenure n in years. Filled in with your numbers:

A real fund's NAV moves every trading day, not once a year, so this is a simplification — useful for comparing scenarios side by side, not a substitute for a scheme's actual NAV history on its factsheet or on AMFI's database.

A lumpsum is a single cash flow, so its annualised return is a plain CAGR: (Maturity ÷ Principal)^(1/years) − 1. On your numbers that works out to about 12.00% a year — close to the 12% you assumed, since a constant annual rate produces a CAGR that converges on itself.

XIRR only earns its keep once there's more than one cash flow on more than one date — a SIP, or a lumpsum topped up later with extra purchases. For a single investment held to a single maturity date, CAGR and XIRR are the same number. If your actual pattern is recurring rather than one-time, the SIP calculator is the more accurate tool.

Flip the question around: to land near ₹4,00,000 in 5 years at the same 12%, how much needs to go in today? Solving P = A ÷ (1 + r)ⁿ puts it at roughly ₹2,26,970 — well above the ₹1,00,000 used in the base scenario, since the target here is set at double the base maturity value.

This view suits a fixed goal — a down payment, a child's education corpus, a retirement number — where you already know what you need and want to size the entry cheque. Two levers close the gap between what you have and what's required: a longer tenure, or a more aggressive (and riskier) rate assumption. If neither is realistic on its own, topping up an available lumpsum with periodic SIP contributions is a common middle path.

Different tenures

Different principal amounts (±15-25%)

Different return assumptions (same principal and tenure)

The rate table usually moves the maturity figure more than the tenure or principal tables do — a sign of how sensitive long-horizon compounding is to the return assumption you pick, and why it's worth rerunning this with a conservative rate rather than trusting one optimistic number.

For comparison, spreading the same investing capacity as a SIP of about ₹1,667 a month at 12% for 5 years could land near ₹1,37,505. That number isn't directly comparable to the lumpsum figure above — the SIP assumption and the cash-flow pattern both differ — but it's a useful sense check if you're deciding between the two for the same pool of money.

If you already hold the full amount, a lumpsum lets it compound from day one; if you're building the amount up from income, a SIP is the only realistic option and doubles as a savings discipline. Plenty of investors do both — a lumpsum for a windfall, a SIP for ongoing income.

This calculator doesn't know your fund category, so treat the figures below as illustrative and confirm current rates before filing — capital gains rules get revised in the Union Budget from time to time.

• Equity-oriented funds (≥65% Indian equities), held over 12 months: LTCG above a ₹1,25,000 yearly exemption is taxed at 12.5%, with no indexation, under rules effective from July 2024. On this scenario's ₹76,234 of illustrative growth, that's roughly ₹0 taxable and about ₹0 of tax — a rough guide only, since real redemptions are rarely one lump-sum exit.
• Equity-oriented funds, held under 12 months: STCG at a flat 20% (post-July-2024 rules), regardless of your income slab.
• Debt-oriented funds bought on or after 1 April 2023: taxed at your income-tax slab rate regardless of holding period, since the Finance Act, 2023 removed indexation-based LTCG for these funds. On the same illustrative gain of ₹76,234, the actual tax depends entirely on your slab — there's no flat rate to quote. Units bought before that date can still sit under the older rules, which is worth checking separately if your folio spans both.
• Exit load: many equity schemes charge around 1% on units redeemed within a short window, often 12 months, of purchase. Not modelled here — check your scheme's factsheet.

The return rate you plug in implicitly picks a fund category. As a rough framework, not personalised advice:

• Equity funds fit money you won't need for at least 5-7 years, where you can sit through a 15-30% drawdown in a bad year without needing to redeem.
• Hybrid or balanced advantage funds blend equity and debt for a smoother ride — a reasonable middle ground when you want growth without full equity volatility.
• Debt funds suit a 1-3 year horizon or capital you want to keep relatively stable, accepting more modest returns and, since April 2023, slab-rate tax.
• A mix across all three, plus an FD is how most lumpsums actually get deployed in practice — rerun this calculator with a different rate for each slice of a mixed allocation.

The same ₹1,00,000 doesn't have to go into an equity fund — a bank FD or a debt fund are the other common homes for a one-time sum, each trading off return, risk, liquidity and tax differently:

An FD suits money you can't afford to see fluctuate; equity funds suit a long horizon where you can hold through drawdowns for potentially higher growth. Use the FD calculator to size up the guaranteed path against this market-linked one.

• Deploying the entire amount right at a market peak. Splitting a lumpsum into 3-6 monthly tranches through an STP is a common way to blunt bad-timing risk without giving up the eventual full deployment.
• Underestimating how a paper loss feels. A lumpsum into equity can show red shortly after investing if markets dip — normal volatility, but only tolerable if the money isn't needed soon.
• Treating 12% as promised rather than assumed. It's an input you chose; a fund's actual NAV rises and falls with the market, and past performance doesn't guarantee future results.
• Ignoring the exit-load window and the 12-month LTCG threshold. Redeeming inside either one quietly shaves off net returns.
• Anchoring on a fund's best recent year. A 40% year won't repeat on demand — long-run averages, typically 8-14% for well-diversified equity funds over multi-year periods, are a steadier planning anchor than a hot streak.

₹1,00,000 invested once at an assumed 12% over 5 years projects to about ₹1,76,234 — an implied CAGR near 12.00%. Whether that's attractive next to your alternatives — a fixed deposit, a home loan prepayment, or simply staying liquid — depends on how you weigh the return against market volatility and the eventual tax bite. Use the sensitivity tables above to see how much the outcome moves with each assumption, and rerun with a more conservative rate if you'd rather plan around a margin of safety than an optimistic number.

Figures on this page are computed live from the principal, rate, and tenure you entered, using annual compounding — one growth step per year applied to a running balance. The tenure, principal, and rate tables recompute the same formula at nearby values. Tax estimates use illustrative rates and exemption thresholds effective from July 2024 and aren't a substitute for professional tax advice. Nothing here is investment advice, a fund recommendation, or a guarantee of future returns — mutual fund investments are subject to market risk.