The Goal Planning (Systematic Investment Plan) is a disciplined investment method in mutual funds or other securities. It allows investors to secure a fixed amount regularly, usually monthly, to a mutual fund scheme. This disciplined approach to investing helps build wealth over time by taking advantage of market fluctuations through rupee cost averaging and the power of compounding. Whether you are a beginner or an experienced investor, the Goal Planning offers a convenient way to grow your wealth systematically.
How to Use the Goal Planning Calculator?
Using the Goal Planning Calculator is simple. Here are the steps to estimate your potential returns:
- Enter the Monthly Goal Planning Amount
Enter the amount you wish to invest in the Goal Planning every month.
- Investment Duration
Specify the years you plan to continue the Goal Planning.
- Expected Annual Return
Input the expected annual rate of return on your investment.
- Read the Outputs
Once you have inputted these details, the calculator will provide you with the following results:
- Maturity Amount: This is the total value of your investment at the end of the investment period, including returns.
- Total Investment: This represents the total amount you have invested throughout the Goal Planning.
- Total Returns: This is the profit earned from the Goal Planning investment.
Formula to Calculate Goal Planning
The Goal Planning Calculator uses an easy formula to project the growth of your investment. The formula is:
A = P*((1+i) ^ n) - 1) / i) * (1+i)
Where:
A = Maturity Amount
P = Monthly Goal Planning Amount
i = Expected Annual Return (in decimal)
n = number of months (typically 12 for monthly Goal Plannings)
Example of Goal Planning Calculation
Let's see an example of how this Goal Planning Calculator works.
Monthly Goal Planning Amount (P): ₹5000
Investment Duration (t): 25 years
Expected Annual Return (i): 12% (0.12 in decimal form)
Number of Months (n): 12 * 25 (since it's a monthly Goal Planning)
Formula:
A = P * ((1+ i) ^ n) - 1) / i) * (1+i)
A = 5000 * ((1 + 0.01) ^ 300) - 1) / 0.01) * (1+0.01)
A = 5000 * ((1.01) ^ 300) - 1) / 0.01) * (1.01)
A = 5000 * (19.78 - 1) / 0.01) * (1.01)
A = 5000 * (18.78 / 0.01) * (1.01)
A = 5000 * 1878 * 1.01
A = 94,83,900
Final Results:
Maturity Amount (A): ₹94,83,900
Total Investment: ₹15,00,000 (₹5,000 per month for 300 months)
Total Returns: ₹79,83,900 (Maturity Amount - Total Investment)
In this example, with a monthly Goal Planning of ₹5,000 and an expected annual return of 12%, your investment could grow to ₹94,83,900 over 25 years using this formula.
Goal Planning Investment Returns of Different Mutual Funds
Benefits of Using the Goal Planning Calculator
Using the Goal Planning calculator has several advantages, such as:
- Accurate Forecasting: The calculator uses a standard formula to give you precise estimates of your investment's future value.
- Time-Saving: Instead of manually calculating potential returns, the Goal Planning calculator provides instant results with just a few clicks.
- Informed Decision-Making: You can visualise different investment scenarios to choose the Goal Planning plan that best suits your financial goals.
- User-Friendly: The calculator is designed to be easy to use, even for those new to investing.
Conclusion
The Goal Planning Calculator is helpful for anyone looking to invest in mutual funds through a systematic approach. It simplifies estimating potential returns and helps you plan your investments more effectively. Whether you're saving for retirement, a child's education, or any other financial goal, this calculator provides valuable insights into how your money can grow over time. Start using the Goal Planning Calculator today to take control of your financial future.
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