Land Calculator Payment

by

SIP Return Calculator

Investment Summary

Total Invested Amount

Estimated Returns

Total Value

function calculateSIP() { var monthlyInvestment = parseFloat(document.getElementById('monthlyInvestment').value); var years = parseFloat(document.getElementById('investmentPeriod').value); var annualRate = parseFloat(document.getElementById('expectedReturn').value); if (isNaN(monthlyInvestment) || isNaN(years) || isNaN(annualRate) || monthlyInvestment <= 0 || years <= 0 || annualRate <= 0) { alert('Please enter valid positive numbers for all fields.'); return; } var monthlyRate = annualRate / 12 / 100; var months = years * 12; // Formula: M = P × ({[1 + i]^n – 1} / i) × (1 + i) var totalValue = monthlyInvestment * ((Math.pow(1 + monthlyRate, months) – 1) / monthlyRate) * (1 + monthlyRate); var totalInvested = monthlyInvestment * months; var estimatedReturns = totalValue – totalInvested; document.getElementById('totalInvestedDisplay').innerText = '$' + totalInvested.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('estimatedReturnsDisplay').innerText = '$' + estimatedReturns.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('totalValueDisplay').innerText = '$' + totalValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('sip-results').style.display = 'block'; }

Understanding Systematic Investment Plans (SIP)

A Systematic Investment Plan (SIP) is a disciplined method of investing a fixed amount of money at regular intervals in mutual funds. Unlike a lump sum investment, an SIP allows you to build wealth over time by taking advantage of rupee-cost averaging and the power of compounding.

How the SIP Formula Works

Our SIP calculator uses the future value formula for an annuity due. The math behind your wealth creation looks like this:

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

  • P: Monthly investment amount
  • r: Monthly periodic rate (Annual rate / 12 / 100)
  • n: Number of payments (Years × 12)

The Power of Compounding: An Example

Consider an investor who starts an SIP of $500 per month with an expected annual return of 12%:

  • After 5 Years: You invest $30,000. Your total value grows to approximately $41,243.
  • After 15 Years: You invest $90,000. Your total value grows to approximately $252,288.
  • After 25 Years: You invest $150,000. Your total value grows to a staggering $948,817.

This example demonstrates how the "wealth gain" component grows exponentially the longer you stay invested. In the 25-year scenario, your earnings are nearly six times your total investment.

Benefits of Using an SIP Calculator

  1. Goal Planning: Determine exactly how much you need to save monthly to reach a specific financial target (like retirement or a child's education).
  2. Risk Mitigation: By visualizing long-term returns, you are less likely to make emotional decisions based on short-term market volatility.
  3. Instant Adjustments: Easily see how increasing your monthly contribution by even $50 can significantly impact your final corpus due to compounding.

Leave a Comment