Methodology
How this calculator works
The calculator treats each SIP instalment as invested at the beginning of the month. P is the monthly contribution, i is the monthly expected return, and n is the number of monthly contributions. We also calculate every month individually so the table and chart use the same cash-flow schedule.
FV = P × [((1 + i)ⁿ − 1) ÷ i] × (1 + i)
Assumptions
- Contributions are made at the beginning of each month.
- The expected annual return is converted to a monthly rate by dividing by 12.
- Returns are constant for illustration; real market returns vary and may be negative.
- Taxes, exit loads, expense ratios and transaction costs are not included.