PPFAS SIP Calculator
Our PPFAS SIP calculator will help you estimate the wealth to be earned based on your investment duration, monthly SIP installment amount, and the expected annual rate of return. Instead of spending your time and energy on manual calculation, use our SIP calculator and do a real-time estimation.
For the past few years, mutual funds have gained a lot of popularity among Indian investors. You can invest in mutual funds through two modes - lumpsum and SIP (Systematic Investment Plan). SIPs allow investors to invest a predetermined monthly amount, and investors can start an SIP for as low as ₹500. SIPs help investors build regular investing habits and instill discipline in their investment journey.
How Does The PPFAS SIP Calculator Work?
The PPFAS SIP calculator works based on the below formula:
where:
FV is the future value of your investment
P is the monthly investment amount
r is the monthly rate of return, which is the assumed annual return divided by 12
n is the total number of months or the investment duration
Each month’s instalment is counted at the start of the month, which is why the formula ends with × (1 + r).
Example
Let's say, you are looking to start a monthly SIP for ₹6000. You expect to earn an annual return rate of 9.5% and want to stay invested for 7 years. Below is how you can calculate the future value of your investments.
Convert the annual rate of return to a monthly rate: r = 0.095/12 = 0.00792
Calculate the total number of months: n = 7 x 12 = 84
Now, put the values in the formula:
FV = 6,000 × [((1 + 0.095/12)^84 − 1) ÷ (0.095/12)] × (1 + 0.095/12)
FV = 6,000 × 119.6012
FV = ₹7,17,607 (approximately)
How Should You Use The PPFAS SIP Calculator?
Whenever you invest in mutual funds, it is important to calculate the returns before investing. An SIP calculator will help calculate the maturity value of your investments. Here's a guide to use the calculator:
- Firstly, enter the monthly investment amount.
- Next, you have to enter the rate of return you expect to earn from the investment amount.
- Put in the number of years you would wish to stay invested in the scheme.
Once all the details are entered, you can see the future value of your investments.
Example
Ms. Olivia wishes to invest ₹8000 every month and looks to stay invested for five years. She expects a return rate of 11.5% every year. Here’s how we can calculate the future value of Olivia’s investments.
Converting the annual rate of return to a monthly rate: r = 0.115/12 = 0.00958
Calculating the total number of months: n = 5 x 12 = 60
The next step is the most important one and that is to put the above values in the formula.
FV = 8,000 × [((1 + 0.115/12)^60 − 1) ÷ (0.115/12)] × (1 + 0.115/12)
FV = 8,000 × 81.35716
FV = ₹6,50,857 (approximately)
Benefits Of Using The PPFAS SIP Calculator
The SIP calculator offers immense benefits. Below are some of them.
- The SIP calculator helps investors estimate the potential returns on their investments based on different variables such as investment amount, expected rate of return, and tenure. This helps investors set realistic financial objectives.
- Investors can compare the potential returns of various mutual fund schemes or portfolio by using SIP calculators. This helps investors make informed investment decisions.
- SIP calculators are user-friendly and readily available on the Koshex website. They need basic inputs and offer instant results.