Saturday, March 21, 2009

Formula for Calculating SIP Return


Here is the formula for SIPs return calculation.

A = S*R*(R Power n -1)/(R-1)
In the above formula -
A = maturity amount
S = SIP amount (plz. note in case of multiple monthly SIPs it`s advisable to clubbed all SIPs considering a big single SIP)
n = Time duration of SIPs
R = 1 + r/100 (where r is mly. rate of return)

Plz. note if the SIP frequency is qtly. adjust the rate of return to it`s frequency.

The above formula is some what complicated to calculate manually so it`s advisable to use EXL sheet.


Thanks to Ashal for valuable inputs

Also visit http://equityadvise.blogspot.com for an indepth Equity Analysis

4 comments:

  1. If my SIP amount is changed midway...then what is the formula?

    ReplyDelete
  2. Is "n" is in months or years?

    ReplyDelete

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