Work out what a monthly SIP becomes over time at an assumed rate of return, with the value at the end of each year.
| Year | Invested so far | Value |
|---|---|---|
| 1 | ₹60,000 | ₹64,047 |
| 2 | ₹1,20,000 | ₹1,36,216 |
| 3 | ₹1,80,000 | ₹2,17,538 |
| 4 | ₹2,40,000 | ₹3,09,174 |
| 5 | ₹3,00,000 | ₹4,12,432 |
| 6 | ₹3,60,000 | ₹5,28,785 |
| 7 | ₹4,20,000 | ₹6,59,895 |
| 8 | ₹4,80,000 | ₹8,07,633 |
| 9 | ₹5,40,000 | ₹9,74,108 |
| 10 | ₹6,00,000 | ₹11,61,695 |
Each month's instalment is added at the start of the month and everything in the pot then grows for one month at a twelfth of the annual rate. The next month repeats it. That is why the value at the end is much larger than the sum of the instalments: the early ones have been compounding the longest.
The rate you enter is an assumption, not a promise. A SIP into an equity fund or a stock does not return a fixed percentage each year — it goes up and down, sometimes for years at a time, and arrives at an average only in hindsight. Two portfolios with the same average can end very far apart depending on the order the good and bad years arrived in.
Expense ratios, exit loads, brokerage, stamp duty and capital gains tax all come out of the figure above, and none of them are included here.
Every figure above rests on a rate you chose. These pages use the prices that really occurred.
Not investment advice — read the disclaimer.