1. What is a WMPF Lump Sum Calculator?

Definition: This calculator estimates the future value of a lump sum investment using compound interest, similar to provident fund calculations.

Purpose: It helps individuals plan their long-term savings and understand how their money can grow over time.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( FV \) — Future value of investment ($)
• \( P \) — Principal lump sum amount ($)
• \( r \) — Annual interest rate (in decimal)
• \( n \) — Number of years invested

Explanation: The formula calculates compound interest, where interest earned each year is added to the principal for future interest calculations.

3. Importance of Lump Sum Calculation

Details: Understanding future value helps with retirement planning, major purchase savings, and comparing investment options.

4. Using the Calculator

Tips: Enter the principal amount, annual interest rate (default 0.05 for 5%), and investment period in years (default 10). All values must be ≥ 0.

5. Frequently Asked Questions (FAQ)

Q1: How is this different from regular savings?
A: This assumes compound interest (interest on interest) which typically yields higher returns than simple interest.

Q2: What's a typical WMPF interest rate?
A: Rates vary, but 4-6% is common for provident funds. Check current rates with your provider.

Q3: Does this account for inflation?
A: No, the result shows nominal future value. For real value, subtract expected inflation.

Q4: How often is interest compounded?
A: This calculator assumes annual compounding. More frequent compounding would yield slightly higher returns.

Q5: Can I use this for regular contributions?
A: No, this is for lump sums only. For regular contributions, use an annuity calculator.