SIP Calculator explained with worked examples

A formula is easier to trust once you have seen it work on real numbers. This guide runs the same SIP formula through three different monthly amounts, so you can see how the amount, the return and the tenure each push the maturity value around. All three assume the return stays steady every month, which is a simplification — real markets do not move in a straight line.

A small monthly SIP

₹2,000 a month at 10% a year for 5 years grows to ₹1,56,165. You invest ₹1,20,000, so the gain is ₹36,165. The return looks modest, but the gain is already more than a quarter of the amount invested, which shows why even a small regular amount is worth starting.

A mid-size SIP

₹5,000 a month at 12% a year for 10 years grows to ₹11,61,695. You invest ₹6,00,000 over those 10 years, so the gain is ₹5,61,695. Stretch the same monthly amount to 15 years and the gain grows faster than the amount invested, because each year’s gains start earning gains of their own.

A long SIP

₹3,000 a month at 12% a year for 20 years grows to ₹29,97,444. You invest ₹7,20,000, so the gain is ₹22,77,444. The gain here is more than three times the amount invested. That is compounding over 20 years doing the heavy lifting, not the monthly amount, which stayed modest throughout.

Frequently asked questions

Why does a longer SIP gain so much more?

Because gains compound. Each year’s growth is added to the balance, and the next year’s return is earned on that larger balance.

Does a higher return always beat a longer tenure?

Not always. A slightly lower return over a much longer tenure can beat a high return over a short one. Compare maturity values, not just the return figure.

Can I check these numbers by hand?

Yes for the 0% case, where the maturity value is just the monthly amount multiplied by months. For any other return you need the full formula, which is why the calculator exists.