SIP Calculator (Systematic Investment Plan)

SIP (Systematic Investment Plan) returns calculate the future value of regular, periodic investments made at a fixed interval, the investment equivalent of compound interest applied to ongoing deposits rather than a lump sum.

Core formula (Future Value of SIP): FV = PMT × [((1 + r)^n − 1) ÷ r] × (1 + r)

Where:

• FV = future value of the SIP at the end of the investment period
• PMT = the periodic investment amount (e.g., monthly SIP amount)
• r = periodic interest rate (annual rate ÷ 12 for monthly SIPs)
• n = total number of investment periods (years × 12 for monthly)
• The final × (1 + r) adjusts for beginning-of-period contributions

Worked example: Monthly SIP: ₹5,000 | Annual return: 12% (historical Indian equity average) | Duration: 15 years

r = 12% ÷ 12 = 1% per month = 0.01 n = 15 × 12 = 180 months FV = 5,000 × [((1.01)^180 − 1) ÷ 0.01] × 1.01 FV = 5,000 × [(5.9958 − 1) ÷ 0.01] × 1.01 FV = 5,000 × 499.58 × 1.01 = ₹25,22,880 (about ₹25.23 lakh)

Total invested = ₹5,000 × 180 = ₹9,00,000 Wealth gained = ₹25,22,880 − ₹9,00,000 = ₹16,22,880, all of it compounding rather than contribution.

Power of time in SIP:

Key SIP advantage: Rupee cost averaging, buying more units when markets are low and fewer when high, smooths volatility and removes the temptation to time the market. SIPs in broad index funds or diversified equity mutual funds are among the most reliable long-term wealth-building tools available.