Calculate your wealth growth over time with compound interest.
Total Invested Amount:$0
Estimated Returns:$0
Total Value:$0
Understanding SIP and Power of Compounding
A Systematic Investment Plan (SIP) is a disciplined way to invest in mutual funds or stocks. Instead of a lump sum, you invest a fixed amount regularly (monthly, quarterly). This calculator helps you visualize the Power of Compounding and Rupee Cost Averaging.
How the Calculation Works
The SIP formula used is: FV = P × [({(1 + i)^n} – 1) / i] × (1 + i)
If you invest $500 per month for 10 years at an expected return of 12% per annum:
Total Invested: $60,000
Estimated Returns: $56,169
Total Future Value: $116,169
This shows that over time, your returns can nearly match your actual investment, thanks to compounding interest growing on your previous gains.
Why Use a SIP?
1. Financial Discipline: Automates your savings habits.
2. Convenience: You don't need a large amount to start; you can begin with as little as $10.
3. Market Timing: You don't need to time the market. You buy more units when prices are low and fewer when prices are high.
function calculateSIP() {
var monthlyInvestment = parseFloat(document.getElementById('monthlyInvestment').value);
var annualRate = parseFloat(document.getElementById('annualRate').value);
var years = parseFloat(document.getElementById('investmentTenure').value);
if (isNaN(monthlyInvestment) || isNaN(annualRate) || isNaN(years) || monthlyInvestment <= 0 || annualRate <= 0 || years <= 0) {
alert("Please enter valid positive numbers for all fields.");
return;
}
// Monthly interest rate
var i = (annualRate / 100) / 12;
// Number of months
var n = years * 12;
// SIP Formula: FV = P × ({[1 + i]^n – 1} / i) × (1 + i)
var futureValue = monthlyInvestment * ((Math.pow(1 + i, n) – 1) / i) * (1 + i);
var totalAmountInvested = monthlyInvestment * n;
var estReturns = futureValue – totalAmountInvested;
// Display Results
document.getElementById('sip-results').style.display = 'block';
document.getElementById('totalInvested').innerHTML = '$' + totalAmountInvested.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('estimatedReturns').innerHTML = '$' + estReturns.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalValue').innerHTML = '$' + futureValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
}