A systematic investment plan is a fixed monthly investment compounding at an assumed annual rate, and its maturity value follows an annuity-due formula — every installment earning returns from the start of its month. The projection here splits that maturity value into amount invested versus estimated returns, recalculates on every keystroke, and formats amounts in Indian rupees with lakh/crore digit grouping.
The exact formula this tool computes
FV = P × ((1 + r)^n − 1) / r × (1 + r), where P is the monthly installment, r is the monthly rate (annual percentage ÷ 12 ÷ 100), and n is months (years × 12). A 0% return degrades gracefully to FV = P × n instead of dividing by zero.
The trailing (1 + r) factor makes this an annuity-due: every installment earns returns from the start of its month, matching how SIP units are typically allotted on the SIP date. It reads slightly higher than an end-of-month (ordinary annuity) calculator — ₹8,167 higher on the default inputs.
A worked projection to check by hand
Take ₹10,000 per month at 12% for 5 years. Then r = 0.01, n = 60, and FV = 10000 × ((1.01^60 − 1) / 0.01) × 1.01 = ₹8,24,864 (exact value 824863.67). Amount invested is 10000 × 60 = ₹6,00,000, so estimated returns are ₹2,24,864 — about 37% of contributions.
Horizon matters more than most people expect. Keep the same ₹6,00,000 of total contributions but spread them as ₹5,000 monthly over 10 years and the projection nearly doubles to ₹11,61,695 — ₹5,61,695 in returns. Same money in, twice the compounding runway.
What the projection deliberately ignores
The model assumes a perfectly constant monthly return, which no equity fund delivers, and it ignores expense ratios, exit loads, LTCG tax on redemption, and inflation — at 6% inflation, the ₹8.2 lakh five-year corpus above is worth roughly ₹6.2 lakh in today's money. There is no step-up option, so if you raise your SIP annually the real outcome should beat the projection. Treat it as a planning baseline, not a promise.
Questions people ask
Why is the total shown as ₹8,24,864 instead of ₹824,864?
The display uses the en-IN locale: the last three digits group together, then pairs — lakhs and crores rather than thousands and millions. ₹8,24,864 reads as 8.25 lakh.
Why does my bank's SIP calculator show a slightly different number?
Almost always the annuity convention. This tool compounds each installment from the start of its month (annuity-due); end-of-month calculators produce values lower by a factor of (1 + r) — about 1% at a 12% annual rate. Rounding is display-only; internals run at full floating-point precision.
Can I model a lump sum or an annual step-up?
No — this is strictly a fixed monthly contribution model. A lump sum compounds as P × (1 + r)^n; compute it separately and add it to the projection.
To work out how many months remain until a goal date before setting the tenure, use the date difference calculator; the age calculator does the same for retirement-age horizons.