# SIP CALCULATOR SIP is a method of investing a little amount of money in a mutual fund on a regular basis over a lengthy period of time. It aids in the slow accumulation of wealth and is a straightforward method to invest without attempting to timing the market.

# SIP CALCULATOR

Investment Amount is required

Expected Annual Returns is required

Investment Period is required

### What is a Mutual Fund Calculator/SIP?

A mutual fund calculator is a web-based tool that assists investors in calculating their returns and the future value of an investment based on a certain investing plan. While mutual fund investors should ideally approach their investments with a goal-oriented attitude, a mutual fund calculator in India can assist them comprehend how far they’ll get depending on the projected quantity of investment, time horizon, and rate of return.

The mutual fund returns calculator simplifies things by requiring only three inputs: your investment amount (monthly SIP or lumpsum), time horizon, and a rate of return depending on your investing strategy.

### Formula for Calculating Mutual Funds

To manually calculate mutual fund returns, you must first understand the mutual fund return calculation algorithm. Using the mutual fund returns calculator is always lot easier (and faster). This is especially relevant when comparing results from mutual fund investments made utilising either a lump sum or a SIP technique.

Even if you utilise an online Mutual Fund return calculator, knowing the formula that was used to determine the returns on mutual funds that you can obtain from your investments is beneficial. The mutual fund computation formulas are as follows. You’ll see that the formulas for both kinds of investment differ. Do you know why? Continue reading.

## You should know two things about both formulas.

First, the CAGR (compound annual growth rate) formula is used in the lump sum formula, whereas the XIRR formula is used in the SIP formula (Extended Internal Rate of Return). The reason for this is because CAGR is only useful for computing returns on a point-to-point basis. When there are many cash flows (as in SIP), you must utilise XIRR since the returns for each cash flow will change. XIRR calculates a single return percentage for all cash flows and is hence important to SIPs. If you want to understand more about this, you may do so by clicking on XIRR and CAGR.