Mutual Fund Sip Calculator

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Mutual Fund SIP Calculator

Your Projected Wealth

Maturity Amount (INR)

Understanding Systematic Investment Plans (SIP) and How This Calculator Works

A Systematic Investment Plan (SIP) is a popular and disciplined method for investing in mutual funds. It allows you to invest a fixed amount of money at regular intervals (usually monthly) into a chosen mutual fund scheme. This approach helps in averaging your purchase cost over time, reducing market timing risks, and building wealth gradually through compounding.

The Math Behind SIP: Compound Interest in Action

The SIP calculator uses a standard formula to estimate the future value of your investments, taking into account the power of compounding. The formula is derived from the future value of an annuity formula:

FV = P * [((1 + r)^n – 1) / r] * (1 + r)

Where:

  • FV is the Future Value (Maturity Amount) of your investment.
  • P is the periodic investment amount (your Monthly Investment Amount).
  • r is the periodic interest rate. Since the calculator takes an annual growth rate, we need to convert it to a monthly rate: r = (Annual Growth Rate / 100) / 12.
  • n is the total number of investment periods. Since investments are monthly, we convert the investment duration in years to months: n = Investment Duration (Years) * 12.

The calculator computes the total value you can expect to accumulate at the end of your investment horizon, assuming the expected annual growth rate is achieved consistently.

Why Use a SIP Calculator?

  • Goal Planning: It helps you visualize the potential outcome of your regular investments, aiding in financial goal setting (e.g., buying a house, retirement, child's education).
  • Investment Strategy: By tweaking the inputs (monthly investment, duration, expected returns), you can assess different investment scenarios and adjust your strategy accordingly.
  • Understanding Compounding: It demonstrates the significant impact of long-term investing and compounding, motivating consistent investment behavior.
  • Ease of Use: It provides a quick and easy way to get an estimated maturity amount without complex manual calculations.

Important Considerations:

  • The growth rate is an *estimate* and not guaranteed. Actual returns may vary.
  • This calculator does not account for taxes, exit loads, or other charges that might apply to mutual fund investments.
  • It's advisable to consult with a qualified financial advisor before making any investment decisions.
function calculateSIP() { var monthlyInvestment = parseFloat(document.getElementById("monthlyInvestment").value); var annualGrowthRate = parseFloat(document.getElementById("annualGrowthRate").value); var investmentYears = parseFloat(document.getElementById("investmentYears").value); if (isNaN(monthlyInvestment) || isNaN(annualGrowthRate) || isNaN(investmentYears) || monthlyInvestment <= 0 || annualGrowthRate < 0 || investmentYears <= 0) { document.getElementById("result").innerHTML = 'Invalid Input'; return; } var monthlyRate = (annualGrowthRate / 100) / 12; var numberOfMonths = investmentYears * 12; // Calculate Future Value of SIP var maturityAmount; if (monthlyRate > 0) { maturityAmount = monthlyInvestment * (((Math.pow(1 + monthlyRate, numberOfMonths) – 1) / monthlyRate) * (1 + monthlyRate)); } else { // Handle case where growth rate is 0% maturityAmount = monthlyInvestment * numberOfMonths; } var totalInvestment = monthlyInvestment * numberOfMonths; var totalGains = maturityAmount – totalInvestment; // Display result, formatted to two decimal places for clarity var formattedMaturityAmount = maturityAmount.toFixed(2); document.getElementById("result").innerHTML = '₹' + formattedMaturityAmount.replace(/\B(?=(\d{3})+(?!\d))/g, ",") + '' + 'Estimated Maturity Amount (INR)'; }

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