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SIP Calculator : ALL YOU NEED TO KNOW

Updated: Apr 30


Table of Contents:

  • Introduction to SIP Calculator

  • SIP Calculator

  • Benefits of Using a SIP Calculator

  • SIP Calculator as an Online Tool

  • How Does a SIP Calculator Work?

  • AssetPlus SIP Calculator

  • Conclusion & Takeaways on SIP Calculator

  • Faqs on SIP Calculator



Introduction to SIP and SIP Calculator

Systematic Investment Plan (SIP) has emerged as a popular investment method for investors seeking to build wealth in the long term. SIPs offer several qualitative and quantitative benefits. To list a few are:

Qualitative:

  • Discipline in investing.

  • Consistent approach.

  • Ability to focus on the long-term.

Quantitative:

  • Rupee Cost Averaging.

  • Power of Compounding.

  • Aiding in wealth creation, and

  • Fueling financial freedom.

We have introduced the SIP calculator- an excellent financial tool to help you understand and plan your SIP Investments more efficiently. In this comprehensive guide, we'll learn in-depth about the SIP calculator, its working principles, how it determines the return on an SIP investment, and ultimately guide you in your investment decisions.


SIP Calculators: Your Partner in Investment Decisions

A SIP calculator is a handy online tool that assists you in planning your SIP investments in mutual funds. This calculator uses three primary input parameters:

  • Monthly investment amount.

  • Expected rate of annual return.

  • Investment duration.

With these metrics, the SIP calculator produces crucial information like the total investment made, the value of your investment after the specified tenure, and your investment's total gains or growth.


SIP Calculator

Benefits of Using a SIP Calculator

A SIP calculator offers several advantages to investors:

Informed Decision Making:

  • The SIP calculator aids in making informed investment decisions by providing an estimate of future investment value.

Financial Planning:

  • The SIP calculator helps in creating a robust financial plan. It allows you to set investment goals and understand the investment plan needed to achieve them.

Ease of Use:

  • The SIP calculator is easy to use, requiring only basic investment details as inputs.

Saves Time:

  • Manual calculation of future investment value can be time-consuming and complex. A SIP calculator simplifies this process, providing results instantly.

Comparison of Different Scenarios:

  • The SIP calculator allows you to compare different scenarios by changing the input values. This helps in understanding the effect of different variables on the future value of the investment.


SIP Calculator as an Online Tool

Computing the value of an SIP investment and the returns it could generate is a time-consuming process and manual calculations are not user friendly. An online SIP calculator is an automatic tool that is constructed using specific algorithms and the essential parameters for calculations.

Using a SIP calculator online is a straightforward process:

  • Enter the monthly SIP investment amount.

  • Specify the expected annual return rate.

  • Provide the investment duration in years.

  • Click on 'Calculate' to get the future value of the investment.


How Does a SIP Calculator Work?

A SIP calculator operates on the principle of compounding. Compounding refers to the process of reinvesting the returns earned on an investment to generate further returns. The formula used by the SIP calculator to compute the future value of SIP investments is:

A = P [(1 + r/n) ^ nt - 1] / (1 - (1 + r/n) ^ (-1/3))

Here,

  • A is the future value of the SIP investment

  • P is the monthly SIP investment amount

  • r is the expected annual return rate (in decimal form)

  • n is the number of compounding periods per year

  • t is the investment duration in years.


AssetPlus SIP Calculator

AssetPlus offers a simplified SIP calculator to help you estimate and map your investment to your financial goals. It is an interactive calculator that provides you with accurate results.

Using the AssetPlus SIP calculator is simpler than making your coffee. Here’s the procedure:

Scroll above to use the calculator and input the following information:

  • Investment amount, 

  • Duration,

  • The expected rate of return,

  • Annual Increment (in case you wish to step up your SIP anytime during the year)


You will find your results on the right side, including the total amount invested and the growth and final value adjusted with inflation.

You can adjust the variables to analyze different investment scenarios and make informed decisions.

Using the AssetPlus SIP calculator, you can make informed decisions, appreciate the growth potential of your investments, and evaluate different investment scenarios.


Conclusion & Takeaways on SIP Calculator

A SIP calculator is an essential tool for every investor considering investing in Mutual Funds Online through SIP. It simplifies the understanding of the potential returns and growth of the investment, thereby aiding in effective financial planning. Whether you are a seasoned investor or a beginner, incorporating the use of a SIP calculator in your investment decisions can be highly beneficial.


And for a comprehensive investment experience, empower yourself with AssetPlus Calculator, a powerful tool that enhances your financial planning.

Key Takeaways:
  • A SIP calculator is a useful tool for planning SIP investments in mutual funds.

  • It works on the principle of compounding and uses a mathematical formula that is, A = P [(1 + r/n) ^ nt - 1] / (1 - (1 + r/n) ^ (-1/3)).

  • It requires certain inputs from the user such as investment amount, expected annual return rate, and investment duration.

  • It provides key insights into the future value of the investment, potential earnings, and overall growth.

  • Using a SIP calculator aids in informed decision-making and effective financial planning.


Faqs on SIP Calculator

What is the purpose of a SIP calculator?

A SIP calculator helps investors plan their SIP investments effectively. It provides an estimate of the future value of the investment, helping in informed decision-making and financial planning.

How accurate are the results from a SIP calculator?

Can I use a SIP calculator for different types of mutual funds?

Yes, a SIP calculator can be used for different types of mutual funds, provided the expected annual return rate is known.

How to use AssetPlus’s SIP calculator?

Can I change the values and compare different scenarios using AssetPlus SIP calculator?


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