Explained: Want to calculate the future value of your Rs 10,000 SIP? Here’s the formula
A Rs 10,000 monthly SIP can grow into a sizeable corpus over time, but the final value depends on the investment duration and expected returns. Here’s how investors can use the future value formula to estimate their SIP corpus at different return rates.
Mutual fund investors can determine the future value of their Rs 10,000 SIP investments by using a specific formula. This calculation helps estimate how much their regular monthly contributions could grow over a set period, given an assumed rate of return.
To compute this, investors need three key variables: the amount (P) they invest each month, the compounded rate of return (i), and the investment duration in months (n). The future value formula is as follows:
FV = P [ (1+i)^n-1 ] * (1+i)/i
For instance, if an investor allocates Rs 10,000 monthly for a 10-year period with a projected 10% return rate, the future value of this SIP would amount to approximately Rs 20.48 lakh. Similarly, with expected returns of 12% and 15%, the future values would be around Rs 23 lakh and Rs 27.52 lakh respectively.
Written by urgent.news from The Economic Times - Top News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
