What is a SIP Calculator?
A SIP (Systematic Investment Plan) calculator is a tool that helps you determine the future value of your monthly mutual fund investments. It assumes a fixed monthly investment and a compounded annual growth rate (CAGR).
How Does SIP Work?
SIP is a method of investing a fixed sum regularly in a mutual fund scheme. SIP allows you to buy units on a given date each month, allowing you to benefit from the power of compounding and rupee-cost averaging.
SIP Calculation Formula
The formula for SIP is:
FV = P × [ (1+i)^n - 1 ] / i × (1+i)
- FV: Future Value
- P: Monthly Investment
- i: Periodic Rate of Interest (Annual Rate / 12 / 100)
- n: Number of Months