SIP Calculator
Maturity value of a Systematic Investment Plan (fixed monthly investment) at an expected annual return
Interactive Sandbox
Adjust values in real-time and observe mathematical cause-and-effect
Exponential Compounding Growth: Returns generate subsequent returns over time t, rapidly accelerating capital growth.
Variable Mechanics
Roles, constraints & impacts
Monthly Investment
Formula Parameter
Expected Annual Return
Formula Parameter
Investment Period
Formula Parameter
At a Glance
Gotchas, units & real-world use
Formula Nature & Mechanics
Exponential Compounding Growth: Returns generate subsequent returns over time t, rapidly accelerating capital growth.
Common Mistakes & Traps
- Entering annual percentage rate (e.g. 7%) as 7 instead of converting to decimal 0.07.
- Neglecting the compounding frequency (n): monthly compounding produces higher yield than annual.
- Ignoring inflation drag when evaluating long-term nominal returns.
Dimensional Analysis & Units
Currency × (1 + rate)^time = Future Currency ($)
Real-World & Industry Application
Retirement 401(k) / Roth IRA compounding, mortgage amortization schedules, bond yield analysis, and inflation depreciation modeling.
Worked Example: SIP
Given:
- monthly = 5000
- rate = 12
- years = 10
- Monthly return i = 12% ÷ 12 = 1.0000%
- Number of instalments n = 10 × 12 = 120
- FV = $5,000 × ((1 + i)ⁿ − 1) ÷ i × (1 + i) = $1,161,695.38
- Amount invested = $5,000 × 120 = $600,000
- Estimated returns = $1,161,695.38 − $600,000 = $561,695.38
Answer: 1161695.38
Frequently Asked Questions
What is the SIP formula?
FV = P × ((1 + i)ⁿ − 1) ÷ i × (1 + i). Maturity value of a Systematic Investment Plan (fixed monthly investment) at an expected annual return.
How do I calculate SIP?
Enter Monthly Investment (monthly), Expected Annual Return (rate), Investment Period (years) into the calculator. It applies FV = P × ((1 + i)ⁿ − 1) ÷ i × (1 + i) and shows every step of the working.
