This simple SIP Calculator helps assess forecasted portfolio value of a Systematic Investment
How does the SIP Calculator work?
This calculator uses the concept of Future Value of an Annuity. The future value is represented by the following equation:
Fv = P*(1+r)^n + PMT*((1+r)^n – 1)/r,
- P = Initial investment
- r = Estimated rate of return on investment
- n = Investment duration
- PMT = Monthly/ periodic or Systematic contribution
- Fv = Future value of the investment
How to use the SIP Calculator
You can use this calculator to estimate the future value of an investment made through the SIP route.
Let’s take an example. Let’s assume that you wish to invest in a smallcase using the SIP route. Your initial investment is 1 Lakh and you plan to contribute 10 Thousand each month. The estimated return potential for the chosen smallcase is lets say 10% annually, and you want to stay invested for a period of 10 years.
Punch-in the numbers in the SIP Calculator, and you get the potential future value of the investment at the end of 10 years, which is Rs. 2,319,154.