A Systematic Investment Plan (SIP) is a disciplined method of investing a fixed sum of money at regular intervals in mutual funds. Unlike lump-sum investments, SIPs allow you to benefit from rupee-cost averaging and the power of compounding.
The Mathematics Behind SIP
The SIP formula used by our calculator is:
M = P × ({[1 + i]^n – 1} / i) × (1 + i)
M: Amount you receive upon maturity.
P: Amount you invest at regular intervals.
i: Periodic rate of interest (Annual rate divided by 12 months).
n: Total number of payments (Years multiplied by 12).
Example Scenarios
Monthly SIP ($)
Annual Return (%)
Period (Years)
Maturity Value ($)
$200
12%
10
$46,468
$500
15%
20
$757,977
$1,000
10%
15
$417,924
Benefits of SIP Investing
1. Disciplined Saving: SIPs automate your savings, ensuring you invest before you spend.
2. Lower Risk: By investing monthly, you buy more units when prices are low and fewer when prices are high, averaging out your cost.
3. Compounding Power: Even small amounts invested early can grow into a significant corpus due to the cumulative returns over decades.
function calculateSIP() {
var monthlyInvestment = parseFloat(document.getElementById("monthlyInvestment").value);
var annualRate = parseFloat(document.getElementById("expectedRate").value);
var years = parseFloat(document.getElementById("investmentPeriod").value);
var resultsDiv = document.getElementById("sipResults");
if (isNaN(monthlyInvestment) || isNaN(annualRate) || isNaN(years) || monthlyInvestment <= 0 || annualRate <= 0 || years <= 0) {
alert("Please enter valid positive numbers in all fields.");
return;
}
// Monthly interest rate
var i = (annualRate / 100) / 12;
// Total number of months
var n = years * 12;
// SIP Formula: FV = P × ({[1 + i]^n – 1} / i) × (1 + i)
var maturityValue = monthlyInvestment * ((Math.pow(1 + i, n) – 1) / i) * (1 + i);
var totalInvested = monthlyInvestment * n;
var wealthGained = maturityValue – totalInvested;
// Formatting currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 0,
maximumFractionDigits: 0
});
document.getElementById("totalInvested").innerHTML = formatter.format(totalInvested);
document.getElementById("wealthGained").innerHTML = formatter.format(wealthGained);
document.getElementById("maturityValue").innerHTML = formatter.format(maturityValue);
resultsDiv.style.display = "block";
resultsDiv.scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}