How it's calculated
A systematic investment plan (SIP) invests a fixed amount in a mutual fund every month. Each instalment buys units at that day's NAV and then grows with the fund. The calculator assumes the fund grows at the same rate every year, works out what each instalment is worth at the end, and adds them up.
It uses the same method as the SIP calculator published by AMFI, the mutual fund industry body: the yearly return is converted to a monthly rate by dividing by 12, and each instalment is invested at the start of its month.AMFI
The formula
Future value = P × ((1 + i)n − 1) ÷ i × (1 + i)
- P = monthly instalment
- i = expected annual return ÷ 12 (12% a year → 1% a month)
- n = number of instalments (years × 12)
The final × (1 + i) is there because each instalment is invested at the start of the month and earns that month's return. If you choose "end of month" in the advanced settings, it is left out. Gains = future value − total invested.
The calculator reproduces AMFI's published examples: ₹5,000 a month for 7 years at 12% grows to about ₹6.60 lakh, and AMFI's investor booklet shows ₹1,000 a month for 25 years at 10% growing to about ₹13.38 lakh.AMFI For the second example the calculator gives ₹13,37,890.
Worked example
₹10,000 a month for 10 years at an assumed 12% grows to ₹23,23,391, on ₹12,00,000 invested.
| Line | Amount |
|---|---|
| Amount invested | ₹12,00,000 |
| Estimated gains at 12% a year | ₹11,23,391 |
| Estimated value | ₹23,23,391 |
Time matters more than anything else: the same SIP kept going for 20 years grows to ₹99,91,479, about 4.16× the money invested, against 1.94× after 10 years.
Assumptions and limitations
- A constant return. Real fund returns vary every year and can be negative. Try a cautious and an optimistic return to see a range.
- Before tax and exit loads. Gains are taxed when you redeem, lot by lot, depending on the fund type and holding period. The fund's expense ratio is already reflected in its NAV, so use a return net of costs.
- Every instalment is paid on time and nothing is withdrawn.
- For a SIP that rises every year, use the step-up SIP calculator; for a one-time investment, the lumpsum calculator.