It estimates the future value of a one-time investment for an annual return and period that you choose.

A SIP spreads purchases over time and suits regular income. A lumpsum puts all the money in at once and suits surplus cash, ideally invested in stages. Neither guarantees a better result.

Use a cautious figure, not the best past year. Try a range such as 8%, 10% and 12% to see how much the result changes.