SIP Calculator
SIP Calculator
While talking about investing in SIPs, most people can relate to it as a mutual fund investment. However, investing in SIPs is not just limited to mutual funds, you can even consider Recurring Deposits, PPF deposits, etc where you make a small savings on a regular basis as an example of SIP.
SIP is Systematic Investment Plan, where a regular and constant amount is invested on a timely manner for a given period of time. This is a great way to build wealth.
SIP Calculator will help you in calculating the total amount that you would have saved along with the returns generated on the savings over a period of time.
How does the SIP Calculator work?
In order to use the SIP Calculator, one should know the following terms:
Amount Invested Each Month in an SIP is a constant amount. Ex: If you are investing Rs. 5000 a month, then you would continue investing Rs. 5000 only every month for a particular period.
Expected Rate of Interest is the interest percentage expected to be earned on the total savings over the period of time.
Number of monthly installments are the total number of times you have invested on a monthly basis. For example: If you have invested regularly for 5 years, then the number of monthly installments would be 5 X 12 months = 60.
Total Invested Amount is equal to Amount invested per month multiply by number of monthly installments
Maturity Amount is the sum of total investments made over a period of time plus the expected returns on it.
Expected Returns is the total earnings from investments.
Formulas:
FV = P [ (1+i)^n-1 ] * (1+i)/i
E = FV – P
Example:
Assume you invest Rs 1000/month at an expected return of 5% for 10 years.
Maturity Amount = 1000*5/12* [(1+5/12)120 -1] [(1+5/12)/5/12] = Rs. 155929.28
Expected returns = 155929.28 – 120000 = Rs. 35929.28
Why should you use a SIP Calculator online?
Using the SIP Calculator online helps you in making a financial decision on whether to invest in a particular financial product or not? on a real-time basis. Thus, helping you grab an opportunity quickly.
Advantages of using a SIP Calculator:
Listed below are few advantages of using a SIP Calculator:
The SIP Calculator helps you in calculating the total invested amount, expected returns and total maturity amount irrespective of the currency denomination, that is, you can use it for calculation in INR, USD, JPY, EUR or any currency of your choice.
SIP Calculator helps you in making decisions quickly that is because you can compare different financial products for investments on parameters like total investments, tenure or expected rate of return on a real time basis.
The SIP Calculator does all the mathematics functions online with few inputs on your end. No coding or doing the maths is needed, this makes it easy to operate.
You can get an estimated maturity amount and the total expected returns for an investment calculated on SIP Calculator, which helps in making a financial plan that matches your financial goals.