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function calculateSIP() { var P = parseFloat(document.getElementById('sipAmount').value); var annualRate = parseFloat(document.getElementById('sipRate').value); var years = parseFloat(document.getElementById('sipYears').value); if (isNaN(P) || isNaN(annualRate) || isNaN(years) || P <= 0 || annualRate <= 0 || years <= 0) { alert("Please enter valid positive numbers for all fields."); return; } var i = (annualRate / 100) / 12; var n = years * 12; // Formula: M = P × ({[1 + i]^n – 1} / i) × (1 + i) var maturityValue = P * ((Math.pow(1 + i, n) – 1) / i) * (1 + i); var totalInvested = P * n; var estReturns = maturityValue – totalInvested; document.getElementById('totalInvested').innerText = "₹" + totalInvested.toLocaleString('en-IN', {maximumFractionDigits: 0}); document.getElementById('estimatedReturns').innerText = "₹" + estReturns.toLocaleString('en-IN', {maximumFractionDigits: 0}); document.getElementById('totalMaturity').innerText = "₹" + maturityValue.toLocaleString('en-IN', {maximumFractionDigits: 0}); document.getElementById('sipResults').style.display = 'block'; }

What is a SIP (Systematic Investment Plan)?

A Systematic Investment Plan (SIP) is a disciplined method of investing in mutual funds. Instead of making a large lump-sum investment, SIP allows you to invest a fixed amount of money at regular intervals (monthly, quarterly, or weekly). It is a popular tool for long-term wealth creation due to the power of compounding and rupee cost averaging.

How Does the SIP Calculator Help You?

This SIP calculator helps you estimate the potential returns on your mutual fund investments over a specific period. By entering your monthly contribution, the expected rate of return, and the investment duration, you can visualize how small regular savings can grow into a substantial corpus.

• Financial Planning: Determine how much you need to invest to reach specific goals like retirement or buying a home.
• Accuracy: Manual SIP calculations involving compound interest are complex; this tool provides instant, accurate results.
• Scenario Testing: Compare different return rates and timeframes to see how they impact your final wealth.

The SIP Formula Explained

The calculation uses the future value of an annuity-due formula:

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

Where:

• P: Monthly investment amount
• r: Monthly interest rate (Annual Rate / 12 / 100)
• n: Number of payments (Years × 12)
• FV: Future value or Maturity amount

Practical Example of SIP Growth

Let's say you start an SIP with ₹5,000 per month for 15 years. If the fund provides an average annual return of 12%:

• Total Amount Invested: ₹9,00,000
• Estimated Wealth Gained: ₹16,22,880
• Total Value at Maturity: ₹25,22,880

Notice how the wealth gained is significantly higher than the actual amount invested? That is the Power of Compounding in action over long durations.

Frequently Asked Questions (FAQ)

1. Can I change the SIP amount during the tenure?

Yes, many mutual fund houses allow you to "Step-up" your SIP annually or change the amount, though this calculator assumes a fixed amount for simplicity.

2. Are SIP returns guaranteed?

No, mutual fund returns depend on market performance. The 12% or 15% return rates used in calculations are based on historical market averages and are not guaranteed.

3. What is the best date for an SIP?

Statistically, there is no "best" date. The key to SIP success is consistency and staying invested for the long term, regardless of the date of deduction.