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SIP Calculator (Inflation-Adjusted)
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A Systematic Investment Plan (SIP) computes compound returns using the formula: M = P × [((1+i)^n - 1) / i] × (1+i), where P is monthly deposit, i is monthly return rate, and n is months. Investing ₹10,000 monthly for 10 years at 12% annual return yields ₹11,23,391 in returns on ₹12,00,000 invested, totaling ₹23,23,391.
Calculate mutual fund SIP returns with inflation adjustment.
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How Does a Systematic Investment Plan (SIP) Grow Wealth?
A SIP (Systematic Investment Plan) allows you to invest a fixed amount regularly in mutual funds. The formula for SIP calculation is M = P × ({[1 + i]^n – 1} / i) × (1 + i), where M is the maturity amount, P is the monthly investment, n is the number of months, and i is the periodic interest rate.
Definition: Systematic Investment Plan (SIP)
A method of investing a fixed sum regularly in a mutual fund scheme, promoting disciplined investing and dollar/rupee cost averaging.
What Inputs Are Required for SIP Return Projections?
Required Inputs
- Monthly InvestmentThe amount you plan to invest every month.
- Expected Return (%)The expected annual rate of return on your investment.
- Time Period (Years)The duration of your investment in years.
- Expected Inflation (%)The expected annual inflation rate (optional, for inflation-adjusted returns).
Expected Outputs
- Total InvestedThe total principal amount invested over the time period.
- Estimated ReturnsThe wealth gained through compound interest.
- Total ValueThe final maturity value of your investment.
- Inflation Adjusted ValueThe real purchasing power of your maturity amount.
Who Uses the SIP Calculator?
Goal Planning
Calculate how much you need to invest monthly to reach a specific financial goal.
Retirement Planning
Estimate the corpus you will build over 20-30 years of disciplined investing.
How Do You Calculate Mutual Fund SIP Returns Step-by-Step?
- 1Enter your monthly investment amount.
- 2Set your expected annual return rate and the investment tenure.
- 3Toggle 'Adjust for Inflation' and set the inflation rate to see real returns.
- 4View the detailed breakdown and pie chart of your investment vs. returns.
SIP Calculator Formula and Compounding Facts
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Frequently Asked Questions
What is inflation-adjusted return?
It calculates the real purchasing power of your future wealth by discounting the final amount by the expected inflation rate.
Is SIP better than Lumpsum?
SIP reduces the risk of market volatility through dollar or rupee cost averaging, making it ideal for regular earners, whereas lumpsum is good when you have a large corpus and markets are favorable.