A Systematic Investment Plan (SIP) calculator is an online tool that helps you calculate the return on investments made in mutual funds through SIP. This calculator estimates the future value of your invested amount based on an assumed rate of return.
In SIP, a fixed amount is invested every month. The returns on these monthly investments vary because each installment has a different holding period. As a result, manually calculating SIP returns can become complex.
For example, if an investor contributes Rs 1,000 per month through SIP for one year, the total amount invested will be Rs 12,000. However, the returns will be calculated based on each monthly investment. The return on the first month‘s investment will be higher compared to the return on the twelfth month‘s investment due to the longer holding period.
A SIP calculator works on the following formula –
M = P × ({[1 + i]^n – 1} / i) × (1 + i).
In the above formula –
M is the amount you receive upon maturity.
P is the amount you invest at regular intervals.
n is the number of payments you have made.
i is the periodic rate of interest.
An online SIP calculator helps you determine the amount you will receive upon SIP maturity. It allows you to calculate how much you need to invest each month to reach a specific target amount within a certain period. SIP returns are calculated based on compound interest.
To use Jagran's free SIP calculator, you need to enter the fixed monthly investment amount, the estimated rate of return, and the investment period. The calculator will then compute the expected SIP returns.