SIP Calculator

Premise: The most significant driver of wealth in a Systematic Investment Plan is not your initial or ongoing capital, but the exponential curve of compound interest.

Evidence: If you invest ₹10,000 every month for 20 years at a 12% expected return, your total out-of-pocket investment is only ₹24 Lakhs. However, the final corpus generated is approximately ₹1 Crore. Over 75% of your final wealth comes purely from compounding returns, not your principal.

Conclusion: To maximize the benefits of compounding, the duration of your investment is mathematically more important than the absolute amount you invest. Delaying an SIP by just 5 years can cost you over 50% of your potential wealth.

If you are building your own financial model, you can use the standard Future Value of an Annuity formula. SIP assumes investments are made at the beginning of the period.

Formula:

FV = P × [((1 + i)^n - 1) / i] × (1 + i)

• FV: Future Value (Final Corpus)
• P: Fixed Monthly Investment
• i: Monthly Interest Rate (Annual Rate / 12 / 100)
• n: Number of investment months

Copy-Paste Javascript Snippet:

function calculateSIP(monthlyInvestment, annualRate, years) {
  const i = annualRate / 12 / 100;
  const n = years * 12;
  const fv = monthlyInvestment * ((Math.pow(1 + i, n) - 1) / i) * (1 + i);
  return Math.round(fv);
}

// Usage: ₹10,000 at 12% for 10 years
console.log(calculateSIP(10000, 12, 10)); // Returns 2323391

Many investors focus entirely on the gross return (e.g., 12% CAGR) and the massive nominal corpus generated after 20 years. However, this ignores purchasing power.

If inflation averages 6% per annum, the cost of goods doubles roughly every 12 years. Our calculator's Inflation Adjusted Value engine discounts your future corpus back to today's purchasing power using the formula: Real Value = Future Value / (1 + Inflation Rate)^Years.

Always base your retirement goals on the inflation-adjusted corpus, not the nominal corpus.

The Expense Ratio is the annual fee charged by the Asset Management Company (AMC). While 1% might sound small, it compounds negatively over time.

If you invest ₹10,000 monthly for 20 years at a 12% gross return, but pay a 1% expense ratio (net 11%), you will lose roughly ₹15 Lakhs of potential wealth to fees. Use the Advanced Settings in our calculator to model the exact impact of your mutual fund's expense ratio.