Saturday, March 21, 2009
Formula for Calculating SIP Return
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