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Learn How SIP Calculator Works for Your Investments

SIP Calculator
Learn-How-SIP-Calculator-Works-for-Your-Investments
SIP Calculator

SIP Calculator

Result:

Future Value of SIP:

Amount Invested:

Total Gain:

 

Systematic Investment Plan (SIP) is the process of investing a certain amount of funds within every investing period with a determined rate of return. It comes under an open-ended mutual fund as we can invest in it for as long as we want. It has been nearly 4 years since SIP was introduced in Nepal. SIP Calculator is a key tool for wealth growth. In this blog, we will understand the power of SIP investments. Before learning how to calculate SIP, we must understand what SIP is.

About SIP Calculator

The SIP calculator is designed to calculate the FV (Future Value ) of the fund that you invest until you get its return. Generally, it calculates the amount that you accumulate after the completion of your investing period.

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Essential Terminologies in SIP

  • Mutual fund: A mutual fund is a collected fund or lump sum that is collected by investors and again that money is invested in other certain bonds, debt, shares, equity, etc. It consists of the portfolios that are overseen by the finance or mutual funds manager.
  • NAV (Net Asset Value): Our accounts will be credited as per the NAV values of mutual funds. Net Asset Value is the unit price of the mutual funds with every single unitThe performance of the mutual fund is evaluated by the market value of NAV.
  • Rate of return: The rate of return refers to the percentage amount on what percent gain that will be accumulated on the fund when we sell SIP or withdraw from SIP. The rate of return determines the level of going of our deposits.

Investing periods on SIP

  • Weekly
  • Monthly
  • Quarterly
  • Half-yearly
  • Yearly

Requirements for calculating SIP

  • The amount of money that you want to invest in every fixed period
  • The period or for how long you want to invest in a Systematic Investment Plan (SIP).
  • The rate of return by determined by the SIP mutual funds.

Note: In the absence of any of these requirements Systematic Investment Plan (SIP) cannot be calculated.

How can we calculate SIP?

Since we all are known to the online SIP calculator it uses the following formula for Calculating Future Value (FV) with SIP:

The future value (FV) of a Systematic Investment Plan (SIP) can be calculated using the following formula:

FV = P * [{(1 + r)^n – 1} / r ] * (1 + r)

Where:

  • FV: Future Value
  • P: Principle amount (monthly)
  • r: Expected rate of return (monthly)
  • n: Number of months or period

This formula allows you to estimate the future value of your investment and SIP, taking into account the monthly contribution (P), the expected monthly rate of return (r), and the investment duration in months (n).

Benefits of Knowing the SIP Plan Calculator

  • Secure manual result: SIP is calculated easily through an online SIP plan calculator. But with the given formula we can also get an accurate result if we keep the given interest rate and rate of return within the period.
  • Easy way of calculating: Calculating the funds and investments has never been easier in finance. The SIP plan calculator is simple and uncomplicated which makes it easier to do further calculations. You don’t have to be a maths master to do such calculations.
  •  Discipline in investments: We have to invest our funds within every fixed period which makes people come up with the determination to keep the investment going smoothly with every passing month or with every passing period.
  • Affordability: You will not be required with large funds or bulk amounts to start investing in SIP. You can start investing with as little or as much as of funds you have. The calculator on the website is also free to calculate our needed requirements.

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FAQs:

Is the SIP calculator dependable?

Yes, the SIP calculator is dependable. So far the investors have gained positive results and outcomes from the SIP calculator. You can now calculate the SIP from wherever and wherever you want to.

Can I withdraw my SIP whenever I want?

Yes, the amount can be withdrawn with the likes of investors. Despite that, many SIP mutual funds have exceptional policies regarding investments and withdrawals.

Do we need to keep the same rate of return while calculating SIPs?

No, the rate of return varies from different SIPs mutual funds. You can keep the amount of rate determined by the SIP mutual funds themselves.

How long do we need to invest in SIP for withdrawal?

SIP is an open-ended mutual fund. So we can deposit the funds for as long as we want to and can withdraw them anytime we want to.

How can I calculate SIP?

You can use our given SIP calculating formula to calculate SIP. Or, you can also find online SIP plan calculators that are credible.

CONCLUSION

So, here in a nutshell you can now be able to calculate the SIP using the formula from above. It is essential to learn how to calculate SIP in today’s world. Leaning this helps you decide which mutual fund schemes are better and which give more profit. For healthy growth of your wealth SIP and systematic Investment Plan calculator are crucial.