If you are an investor or planning to invest your money in different mutual funds schemes via SIPs then you will, without any doubt, would like to assess the profit that will be able to make through such an investment. SIP calculator is a tool that can help you in calculating the same. Mutual funds via Systematic Investment Plans are one of the famous options of investment plans. Many investors are putting their investments in these schemes. When it comes to these investments, a SIP calculator plays an important role, it allows the investors to have an idea about their earnings through planned schemes. However, it has to be made clear that this calculator just gives an idea of the return that you might earn but the actual return can vary depending upon the market circumstances. This calculator will take into account only the principal amount, rate of return, and the period for which you are investing your money and will calculate the return accordingly. It won’t take other factors into consideration that may affect the capital gains of the investors while calculating the whole return. In simple words, it may not take exit load or other circumstances into consideration.
The calculation of this calculator is based on an inbuilt formula and that formula is given below:
PR = [P*{R*(1+i)n-1}/i]*(1+i)
In this formula,
PR = Potential returns
P = SIP amount
I = compound interest rate
Apart from all the things mentioned above, there are many benefits of using a SIP calculator. If you want to know about the benefits of this calculator then you can refer to the following points:
- Friendly user interface: One of the major advantages of using this calculator is, it has a very friendly interface. Its user-friendly interface makes it easy to use. It can also be said that you won’t be required to do any extra thing or put in any extra effort. All you will have to do is to fill in the blanks like amount, rate of interest, and maturity period. Once you have filled in all these details, you will have to get the result automatically. It will give you an idea about the return or capital gain that you will be able to earn.
- It helps in financial planning: Another major benefit of using this calculator is that it helps in financial planning. You must be wondering how a calculator can help you in financial planning. Let us tell you that while investing money, you will be concerned with the return that you will be getting. Calculating such returns manually can be difficult and confusing, you may make a mistake in the formula or calculation and you will get the wrong answer. Such a wrong answer may cause you to put money in the wrong scheme or you may miss a good opportunity to make the best out of your money. But a SIP calculator will provide you with accurate results.
These two are the benefits of using a SIP calculator. You can visit 5paisa to know more about this calculator.
