How SIP Calculator Works
This calculator uses the compound interest formula for SIP investments. Each monthly installment is assumed to grow at the expected annual return rate, compounded monthly. The future value represents the total corpus you would accumulate at the end of the investment period.
For example, investing Rs 5,000 per month at 12% annual return for 10 years would give you approximately Rs 11.6 lakh, of which Rs 6 lakh is your investment and Rs 5.6 lakh is returns from compounding.
Power of Starting Early
Starting SIP early makes a massive difference due to compounding. Rs 5,000/month for 30 years at 12% grows to Rs 1.76 crore. But starting just 10 years later, the same SIP for 20 years gives only Rs 49.96 lakh. The extra 10 years of compounding adds over Rs 1.26 crore.