Sbi Personal Loan Interest Rate Calculator

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SIP Returns Calculator

Total Invested

$0

Estimated Returns

$0

Total Value

$0

function calculateSIP() { var P = parseFloat(document.getElementById("sip_monthly_amount").value); var annualRate = parseFloat(document.getElementById("sip_annual_rate").value); var years = parseFloat(document.getElementById("sip_investment_period").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; // SIP Formula: M = P × ({[1 + i]^n – 1} / i) × (1 + i) var futureValue = P * ((Math.pow(1 + i, n) – 1) / i) * (1 + i); var totalInvested = P * n; var estimatedReturns = futureValue – totalInvested; document.getElementById("res_total_invested").innerText = "$" + totalInvested.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById("res_returns").innerText = "$" + estimatedReturns.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById("res_total_value").innerText = "$" + futureValue.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById("sip_results_box").style.display = "block"; }

Understanding Your SIP Returns

A Systematic Investment Plan (SIP) is one of the most effective ways to build wealth over the long term. By investing a fixed amount regularly, you leverage the power of compounding and Rupee Cost Averaging (or Dollar Cost Averaging).

How This SIP Calculator Works

This calculator uses the future value formula for an annuity due. Since SIP payments are usually made at the beginning of each month, interest starts accruing immediately. The formula used is:

FV = P × [((1 + i)n – 1) / i] × (1 + i)
  • P: The amount you invest every month.
  • i: The periodic (monthly) rate of interest (Annual Rate / 12).
  • n: The total number of payments (Years × 12).

The Benefits of Starting Early

Compounding is often called the "eighth wonder of the world." Let's look at an example of how time significantly impacts your wealth:

Investment Period Total Invested ($500/mo) Value at 12% Return
10 Years $60,000 $116,170
20 Years $120,000 $499,574
30 Years $180,000 $1,764,957

Notice how doubling the time from 10 to 20 years increases the value by over 4x, and tripling it to 30 years increases the value by over 15x. This is the exponential growth provided by long-term SIPs.

Key Considerations

  • Inflation: Remember that while $1 million looks great today, inflation will reduce its purchasing power in 20 years. Always aim for a target higher than your current requirements.
  • Market Volatility: Mutual fund and stock market investments are subject to market risks. SIPs help mitigate this through cost averaging, but returns are not guaranteed.
  • Consistency: The key to SIP success is discipline. Avoiding the temptation to stop your SIP during market downturns is often the difference between average and exceptional returns.

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