What is SIP Calculator?

A Systematic Investment Plan (SIP) calculator is a simple financial tool that helps investors make an estimate of the returns on investment made on mutual funds.

SIP investment has become one of the most popular investment options recently as a lot of investors do not have adequate time and knowledge to conduct research and purchase individual stocks.

SIP calculators provide investors with insights into their mutual fund investments

How does SIP Calculator work?

The SIP Calculator generates results based on the following formula:

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

where,

FV = Future value or the amount you get at maturity.

P = Amount you invest through SIP

i = Compounded rate of return

n = Investment duration in months

r = Expected rate of return

For example:
If you decide to invest Rs 3,000 per month for a tenure of 24 months.

You expect a 12% annual rate of return (r).

You have i = r/100/12 or 0.01.

FV = 3000 * [(1+0.01) ^24 – 1] * (1+0.01)/0.01

You get NPR 81,730 at maturity.