SIP Formula:
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SIP (Systematic Investment Plan) is an investment strategy where you invest a fixed amount regularly (typically monthly) in mutual funds or other investment vehicles. It helps in rupee cost averaging and compounding returns over time.
The calculator uses the SIP formula:
Where:
Explanation: The formula accounts for monthly compounding of returns on your regular investments.
Details: Calculating the future value helps in financial planning, setting investment goals, and understanding the power of compounding in long-term investments.
Tips: Enter monthly investment in INR, expected monthly return rate in percentage, and investment period in months. All values must be positive numbers.
Q1: Is the return rate annual or monthly?
A: The calculator uses monthly return rate. For annual rate, divide by 12 (e.g., 12% annual = 1% monthly).
Q2: Are returns guaranteed in SIP?
A: No, returns depend on market performance. The calculator shows projected value based on your input rate.
Q3: What's the advantage of SIP over lump sum?
A: SIP reduces risk through rupee cost averaging and benefits from compounding over time.
Q4: How accurate is this calculator?
A: It provides mathematical projection assuming constant returns. Actual returns may vary.
Q5: Can I change my monthly amount later?
A: This calculator assumes fixed monthly amount. For variable amounts, more complex calculation is needed.