Calculators
Here are some free calculators to help you with your financial and tax planning.
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Maturity Value
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Monthly Investment Amount
Expected Annual Return Rate(%)
Time Period (In Months)
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What is SIP?
A Systematic Investment Plan (SIP) is a method of investing a fixed amount of money at regular intervals in mutual funds. It allows investors to invest in a disciplined manner without needing to time the market. SIPs help accumulate wealth over time by regularly investing in a chosen mutual fund scheme.
Benefits of SIP
- Disciplined Saving: Encourages regular saving habits, making it easier to achieve long-term financial goals.
- Rupee Cost Averaging: Mitigates the impact of market volatility by buying more units when prices are low and fewer units when prices are high.
- Power of Compounding: Small, regular investments grow over time, earning returns on both the principal and accumulated interest.
- Convenience: Automated monthly deductions from your bank account make it hassle-free.
- Flexibility: Allows investors to start with small amounts and increase the investment amount as their financial situation improves
SIP Formula
The future value of investments made through SIP can be calculated using the formula
FV = P * (((1 + r)^n - 1) / r) * (1 + r)
Where:
- FV = Future value of the SIP
- P = Amount invested at regular intervals
- r = Periodic interest rate (annual interest rate divided by the number of periods per year)
- n = Total number of instalments
Suppose you invest ₹5,000 per month in a mutual fund through SIP for 5 years with an annual return of 12%.
FV = P * (((1 + r)^n - 1) / r) * (1 + r)
Monthly interest rate = 12%/12 months = 1% p.m
Tenure = Total Number of Instalments = 5 years * 12 months = 60 Months
- FV= 5000*(((1+0.01)^15-1/0.01)*(1+0.01)
FV= ₹5000×82.4864
FV= ₹4,12,432
Mool Finance SIP Calculator Benefits
- Accuracy: Ensures precise calculations of SIP returns based on user inputs.
- Comparison Tool: Allows users to compare different SIP plans and select the best option.
- Goal Tracking: Helps in setting and tracking financial goals with visual progress indicators.
- Scenario Analysis: Simulates various investment scenarios to predict potential returns.
- Detailed Reports: Generates comprehensive reports for better understanding and record-keeping.
Conclusion
SIPs are a great way to build a disciplined investment habit and accumulate wealth over time. The Mool Finance Calculator offers a user-friendly platform to make informed investment decisions, helping users achieve their financial goals efficiently.
What is a SIP Calculator, and how does it work?
The SIP Calculator is a tool that helps you estimate the potential future value of your investments made through a Systematic Investment Plan (SIP). It takes into account your investment amount, SIP frequency, expected annual return, and tenure to calculate the projected returns over time. The calculator considers the power of compounding and rupee cost averaging to provide you with a realistic projection.
Why should I use the SIP Calculator?
The SIP Calculator offers several benefits. It helps you visualize the growth of your investments over time, allowing you to make informed decisions about the amount to invest and the duration of your SIP. It takes into account market fluctuations, enabling you to set realistic expectations. Additionally, the calculator assists in aligning your SIP strategy with specific financial goals, whether short-term or long-term.
How accurate are the projections provided by the SIP Calculator?
While the SIP Calculator provides valuable insights, it's important to remember that actual market conditions can vary from projections. The calculator uses estimated average annual returns based on your input, which may not accurately reflect real market performance. Actual returns could be higher or lower depending on market fluctuations and economic conditions.
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