A Systematic Investment Plan (SIP) calculator is a tool that helps you estimate the future value of your mutual fund investments made through SIP. It works on the principle of compound interest. By providing inputs like your monthly investment amount, the expected annual rate of return, and the investment duration, the calculator projects the potential wealth you can accumulate.
The Formula Behind the Magic
The calculation is based on the future value formula:
M = P × ({[1 + i]^n – 1} / i) × (1 + i)
- M is the amount you will receive upon maturity.
- P is the amount you invest at regular intervals (your monthly SIP).
- n is the number of payments you have made (number of months).
- i is the periodic rate of interest (annual rate / 12).
Our calculator simplifies this complex formula and visualizes the results, giving you instant, accurate projections to help you make informed investment decisions.