How This SIP (Systematic Investment Plan) Calculator Works

A SIP (Systematic Investment Plan) Calculator helps you estimate how your regular investments grow over time with compounding returns. Here’s how it works step by step:

1. Choose Investment Frequency

• Select how often you invest: Monthly, Quarterly, Semi-Annually, or Annually.
• This determines the number of contributions per year.
• Example: Monthly = 12 contributions/year

2. Enter Investment Amount

• Enter the amount you will invest each period (Rs.).
• Example: Rs 5,000 per month

3. Enter Expected Annual Return (%)

• Input the expected annual rate of return for your investment.
• Example: 12% per year

4. Enter Investment Duration

• Specify the number of years you plan to invest.
• Example: 5 years

5. Automatic SIP Calculation
The calculator uses the future value formula for SIP:

$$FV = P \times \frac{(1+i)^n - 1}{i} \times (1+i)$$

Where:

• $P$ = Investment per period
• $i$ = Periodic interest rate (annual rate ÷ frequency)
• $n$ = Total number of investment periods
• It calculates:
  • Total Invested – Sum of all your SIP contributions
  • Wealth Gained – Earnings from compounding
  • Maturity Value – Total value at the end of the investment period

6. View Growth Schedule
The table shows yearly breakdown:

• Amount invested
• Returns earned
• Total value

This helps visualize how your wealth compounds year by year.

7. Real-Time Updates

• Any change in amount, frequency, return, or duration automatically updates the results.
• This allows experimenting with different SIP scenarios and planning your investments effectively.