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SIP (Systematic Investment Plan) Returns Calculator

Total Invested Amount: $0
Wealth Gained (Returns): $0
Total Estimated Value: $0
function calculateSIP() { var monthlyInvestment = parseFloat(document.getElementById('sipAmount').value); var annualRate = parseFloat(document.getElementById('sipRate').value); var years = parseFloat(document.getElementById('sipYears').value); var resultDiv = document.getElementById('sipResult'); if (isNaN(monthlyInvestment) || isNaN(annualRate) || isNaN(years) || monthlyInvestment <= 0 || annualRate <= 0 || years <= 0) { alert("Please enter valid positive numbers for all fields."); resultDiv.style.display = "none"; return; } var monthlyRate = annualRate / 12 / 100; var totalMonths = years * 12; // SIP Formula: FV = P * [((1 + i)^n – 1) / i] * (1 + i) // Where P = Monthly installment, i = periodic rate, n = number of periods var futureValue = monthlyInvestment * ((Math.pow(1 + monthlyRate, totalMonths) – 1) / monthlyRate) * (1 + monthlyRate); var totalInvested = monthlyInvestment * totalMonths; var wealthGained = futureValue – totalInvested; document.getElementById('resTotalInvested').innerText = "$" + totalInvested.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resReturns').innerText = "$" + wealthGained.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resTotalValue').innerText = "$" + futureValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); resultDiv.style.display = "block"; }

How to Use the SIP Returns Calculator

A Systematic Investment Plan (SIP) is one of the most effective ways to build wealth over the long term. This calculator helps you estimate the maturity value of your mutual fund investments based on a fixed monthly contribution and an expected rate of return.

Understanding the SIP Formula

The math behind SIP is based on the Future Value of an Annuity Due. Because SIP payments are made at the beginning of each period, the formula used is:

FV = P × [((1 + i)n – 1) / i] × (1 + i)
  • P: Monthly Investment Amount
  • i: Monthly Rate of Return (Annual Rate / 12 / 100)
  • n: Total number of monthly installments (Years × 12)

The Power of Compounding

The primary benefit of an SIP is the Power of Compounding. When you reinvest your returns, those returns generate their own earnings. For example, if you invest $500 monthly at a 12% annual return for 10 years, your total investment of $60,000 grows to approximately $116,170. If you extend that period to 20 years, your $120,000 investment grows to nearly $500,000. This exponential growth is why starting early is crucial.

Practical Example

Let's look at a realistic scenario for a long-term investor:

Metric Value
Monthly SIP $200
Expected Return 10% p.a.
Duration 15 Years
Total Invested $36,000
Estimated Value $83,584

Benefits of Systematic Investing

  1. Rupee/Dollar Cost Averaging: You buy more units when prices are low and fewer units when prices are high, averaging out the cost.
  2. Financial Discipline: It automates your savings, ensuring you invest before you spend.
  3. Mitigates Market Volatility: Since you invest regularly, you don't need to worry about "timing the market."

Disclaimer: Mutual fund investments are subject to market risks. Past performance is not an indicator of future results. This calculator is for educational purposes only.

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