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SIP Calculator

Systematic Investment Plan Growth Estimator

Investment Summary

Total Invested

$0

Estimated Returns

$0

Total Wealth Created

$0

How Does a SIP Calculator Work?

A Systematic Investment Plan (SIP) calculator is an essential tool for investors looking to build long-term wealth through mutual funds or index funds. Instead of investing a lump sum, a SIP allows you to invest a fixed amount regularly (usually monthly). This disciplined approach leverages the power of compounding and rupee-cost averaging (or dollar-cost averaging).

The Power of Compounding

Compounding is the process where the returns on your investment start earning their own returns. The longer you stay invested, the more pronounced this effect becomes. For example, if you invest $500 per month at an 12% annual return for 20 years:

  • Total Invested: $120,000
  • Estimated Wealth: $499,574
  • Wealth Gained: $379,574

As you can see, your earnings are more than triple the amount you actually contributed!

Benefits of Using a SIP

  1. Financial Discipline: Automating your investments ensures you save before you spend.
  2. Rupee Cost Averaging: You buy more units when prices are low and fewer when prices are high, lowering your average cost per unit over time.
  3. Flexibility: You can start with as little as $10-$50 per month depending on the fund.
  4. Inflation Hedge: Historically, equity SIPs have outperformed inflation and traditional savings accounts over long durations.

SIP Formula Used

Our calculator uses the standard future value formula for an annuity due:

FV = P × [{(1 + i)^n – 1} / i] × (1 + i)

Where: FV = Future Value, P = Monthly Amount, i = Monthly Interest Rate (Annual Rate / 12 / 100), n = Number of Months.

function calculateSIP() { var monthlyInvestment = document.getElementById("monthlyInvestment").value; var annualReturnRate = document.getElementById("annualReturn").value; var years = document.getElementById("years").value; if (monthlyInvestment === "" || annualReturnRate === "" || years === "" || monthlyInvestment <= 0 || annualReturnRate <= 0 || years <= 0) { alert("Please enter valid positive numbers for all fields."); return; } var P = parseFloat(monthlyInvestment); var annualRate = parseFloat(annualReturnRate); var nYears = parseFloat(years); // Calculation Logic var i = (annualRate / 100) / 12; // monthly interest rate var n = nYears * 12; // total number of months // Formula: FV = P × [{(1 + i)^n – 1} / i] × (1 + i) var futureValue = P * ((Math.pow(1 + i, n) – 1) / i) * (1 + i); var totalInvested = P * n; var estimatedReturns = futureValue – totalInvested; // Formatting output document.getElementById("resInvested").innerText = "$" + totalInvested.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById("resReturns").innerText = "$" + estimatedReturns.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById("resTotal").innerText = "$" + futureValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); // Display result box document.getElementById("sip-results").style.display = "block"; }

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