SIP Calculator
The SIP Calculator is a perfect solution for meticulous and efficient investment planning. It provides the insights needed to make informed decisions by predicting the future value of your Systematic Investment Plan (SIP).
- Invested Amount
- Wealth Gained
- Invested Amount
- ₹10000
- Wealth Gained
- ₹11589
- Expected Amount
- ₹21589
The total value of your investment after
8 Years will be
| Year | Invested Amount | Wealth Gained | Expected Amount |
|---|---|---|---|
| 2024 | ₹ 20,400 | ₹ 1,139 | ₹ 21,539 |
| 2025 | ₹ 20,400 | ₹ 24,934 | ₹ 45,334 |
| 2026 | ₹ 20,400 | ₹ 51,221 | ₹ 71,621 |
Comprehensive Guide to SIP Calculator
A Systematic Investment Plan (SIP) is a method of investing a fixed amount regularly in mutual funds. A SIP calculator helps investors estimate the future value of their investments based on the monthly contribution, expected rate of return, and investment period. This guide will cover the components, usage, benefits, and practical examples of a SIP calculator.
Components of a SIP Calculator
- Monthly Investment Amount: The fixed amount invested every month.
- Expected Rate of Return: The annual rate of return expected from the investment.
- Investment Period: The duration for which the investments are made, typically expressed in years.
- Future Value: The estimated value of the investment at the end of the investment period.
How to Use a SIP Calculator
- Input Monthly Investment Amount: Enter the fixed amount you plan to invest every month.
- Enter Expected Rate of Return: Input the annual rate of return you expect from the investment.
- Select Investment Period: Choose the duration of the investment in years.
- Calculate: The calculator will compute the future value of the SIP investment based on the inputs.
Formula for Calculating SIP Returns
The future value of a SIP can be calculated using the formula:
Where:
- FV = Future Value
- P = Monthly investment amount
- r = Monthly rate of return (annual rate of return divided by 12 and converted to decimal)
- n = Total number of installments (investment period in years multiplied by 12)
Example Calculation
Let's calculate the future value of a SIP with the following details:
- Monthly Investment Amount: ₹500
- Annual Rate of Return: 12%
- Investment Period: 10 years
First, convert the annual rate of return to a monthly rate:
Convert the investment period from years to months:
Using the formula:
So, the future value of the SIP investment will be approximately ₹116,170.
Conclusion
A SIP calculator is an essential tool for anyone looking to invest in mutual funds through systematic investment plans. By understanding the components and using the calculator effectively, investors can make informed decisions about their investments and plan their finances better.