How this calculator works
A SIP is a contribution schedule, not a promised return. Select whether the annual assumption is effective or a nominal rate compounded monthly. Each monthly contribution buys a notional investment earning the same constant rate. Beginning-of-month contributions earn one more month of growth than end contributions. The result excludes fees, taxes and changes in market prices between instalments.
Formula
For an effective annual return R, monthly i = (1 + R)^(1/12) - 1. For a nominal quote, i = R/12. Future value = P[(1 + i)^n - 1]/i, multiplied by (1 + i) for beginning payments.
Worked example
Two INR 100 month-end investments at a nominal 12% annual rate become INR 201. At month beginnings they become INR 203.01. Twelve INR 500 contributions at 0% total INR 6,000.
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Frequently asked questions
Does a SIP remove market risk?
No. Regular investing spreads purchase dates but the investment can still lose value.
Which return convention should I choose?
Use effective annual for an annual compound return assumption. Use nominal monthly only when the rate is quoted that way.
What is the multiplication factor?
It is final value divided by total contributions; it is not an annualized return.