A Systematic Investment Plan (SIP) is a disciplined method of investing in mutual funds or equity markets. By investing a fixed amount at regular intervals, you benefit from Rupee Cost Averaging and the power of compounding, which can turn small monthly contributions into a significant corpus over time.
How SIP Calculations Work
The SIP formula used in this calculator determines the future value of your investments based on the compound interest principle. The specific formula is:
Consider two scenarios where you invest $500 monthly at a 12% expected annual return:
Period
Total Invested
Estimated Wealth
10 Years
$60,000
~$116,170
20 Years
$120,000
~$499,574
Notice how doubling the time period (from 10 to 20 years) more than quadruples the final wealth. This is why starting early is the most critical factor in wealth creation.
function calculateSIP() {
var monthlyInvestment = parseFloat(document.getElementById('monthlyInvestment').value);
var annualReturnRate = parseFloat(document.getElementById('expectedReturn').value);
var years = parseFloat(document.getElementById('investmentPeriod').value);
// Validation
if (isNaN(monthlyInvestment) || isNaN(annualReturnRate) || isNaN(years) || monthlyInvestment <= 0 || annualReturnRate < 0 || years <= 0) {
alert("Please enter valid positive numbers for all fields.");
return;
}
// Calculation Constants
var monthlyRate = annualReturnRate / 12 / 100;
var months = years * 12;
// SIP Formula: M = P × ({[1 + i]^n – 1} / i) × (1 + i)
var futureValue = monthlyInvestment * ((Math.pow(1 + monthlyRate, months) – 1) / monthlyRate) * (1 + monthlyRate);
var totalInvested = monthlyInvestment * months;
var estimatedReturns = futureValue – totalInvested;
// Formatting Results
document.getElementById('displayInvested').innerText = "$" + totalInvested.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('displayReturns').innerText = "$" + estimatedReturns.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('displayTotal').innerText = "$" + futureValue.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
// Show Results
document.getElementById('sip-results').style.display = 'block';
}
// Initial calculation on load for default values
window.onload = function() {
calculateSIP();
};