A SIP calculator is a helpful tool for calculating the return on money invested. The SIP calculator allows you to estimate the returns on their mutual fund SIP investments. Based on an estimated annual rate of return, you can determine the maturity amount for any of your monthly SIPs.
A SIP calculator on the internet is a smart and useful tool. It
You may follow the simple steps given below:
As soon as you enter the value the calculator will show you the estimated amount you can get at the end of your investment period.
There is no prescribed limit to how much you can invest in a SIP. The minimum amount you can invest per month depends on the mutual funds. It is usually Rs 500.
» Flexible SIP: A flexible SIP allows you to make changes to the SIP investment amount invested.
» Step-Up SIP: A step-up, also known as top-up SIP, will let you increase your SIP investment amounts at fixed periods.
» Perpetual SIP: A perpetual SIP is an investment that continues forever, meaning, there is no fixed tenure or end date for the investment.
» Assists in determining the best investment for the best return.
» Estimates the value of the returns.
» Saves time and displays exact results.
» It also helps you plan and ensures that your investments meet your financial needs.
A SIP calculator works on the formula shown below –
M = P × ([1 + i]n – 1 / i) × (1 + i)
In the above formula –
» M = amount you will receive upon maturity.
» P = amount you invest at regular periods.
» n = number of installments you’ve made.
» i = rate of interest.
For example, you want to invest Rs. 10,000 per month for 12 months at an interest rate of 12%.
Then, the monthly interest rate is 12%/12 = 1/100=0.01
Hence, A = 10,000 x ([1+0.01]12 – 1/0.01) x (1+0.01)
You will receive approximately ₹1,28,093 in a year.