SIP Calculator

What is a SIP Calculator?

The SIP Calculator is a valuable tool that helps investors calculate the future value of their investments in funds created through a Systematic Investment Plan (SIP). By entering the monthly SIP investment amount, the period of investment, and the expected rate of return, the auditor can determine the forecast amount of the corpus when due. This tool empowers investors to make informed investment decisions by providing a clear understanding of the growth potential of their SIP investments.

Understanding the Functioning of a SIP Calculator

The implementation of the SIP calculation is based on the accounting policy for the interest accrued on your SIP investments The quotes used are:

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

where:
FV = future value
P = permanent investment
i = rate of return
n = number of installments

Suppose you want to invest ₹7,500 per month in a mutual fund that gives an annual return of 12%. If you plan to invest for 10 years, the mutual fund SIP calculator will calculate your return as follows.

FV = 7.500 [(1+0.01)^120-1]*(1+0.01)/0.01

FV = ₹17,61,988.75

So at the end of 10 years, your investment will be worth about ₹17,61,988.75.

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SIP Calculation Formula

FV = P[(1+i)^n-1]*(1+i)/i
FV = future value or amount of cash flow at completion.
P = Amount you invest through SIP
i = compound rate of interest
n = investment period in months

How to Calculate SIP Returns in Excel?

Follow the steps below to calculate SIP returns in Excel:

Enter SIP Dates: Enter the SIP investment dates in the A column.
Enter SIP Amount: Enter the SIP amount in column B .
Enter NAVs: In column C, enter the asset value (NAV) per SIP date.
Calculation of units: Divide the number of SIPs in column D by the NAV (=B2/C2).
Calculate the total value: Multiply the latest NAV by all units.
Calculate profitability: Use = ((total value – total investment) / total investment) * 100 for percentage return.

Advantages of Using a SIP Calculator

SIP Calculator India has the advantages it offers to investors:

• Accurate planning: SIP calculators predict the future growth of an investment portfolio based on specific investment parameters. This includes the amount of coverage, the length of time, and the expected benefits. SIP accounting devices use different accounting systems. There are a number of rough approximations that traders can use to manage their finances.
• More information to compare: Changing the properties of your investments in SIP accounting devices, such as the amount, duration, and expected rate, shows that it helps users apply for funds putting them in different situations helping them make the right choices. It depends on their financial goals. Alternative economic strategies will therefore be developed that can achieve the desired results.
• Visualisation of Potential Returns: Through systematic making an investment, SIP calculators assist buyers see how their money can grow. Regarding their making an investment plans, graphs and charts also are to be had to help them understand the strength of compounding. It permits them to make knowledgeable selections.
• Goal Setting and Progress Monitoring: SIP calculators resource investors in setting practicable economic objectives and tracking their progression towards them. By entering their precise monetary goals, which includes retirement financial savings or funding their infant’s training, buyers can estimate the specified funding amount. From there they can see how they progress through the years.

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