Everyone has financial dreams—a down payment for a house, a child's education, or a comfortable retirement. You know the target amount you need, but the big question is: "How much do I need to invest to get there?"
This is where a SIP Planner comes in. It's a goal-oriented calculator that works in reverse. Instead of you telling it your monthly investment, you tell it your final goal, and it calculates the precise SIP amount you need to invest at regular intervals (daily, monthly, or yearly) to reach that target.
How to Calculate the Required SIP Amount
Manually calculating the required SIP involves solving the future value of an annuity formula for the payment amount. While possible, it can be complex and prone to errors. Our online SIP Planner automates this process, giving you instant and accurate results.
The calculation is based on this formula, which determines the periodic payment (P) needed to achieve a Future Value (FV):
P = FV / [ ( (1+i)ⁿ - 1 ) / i ] × (1+i) ]
- P is the periodic investment amount (the SIP amount you need to find).
- FV is the Future Value, your target amount.
- n is the total number of investment periods (e.g., for a 10-year monthly SIP, n = 120).
- i is the periodic rate of return (e.g., for a 12% annual return, the monthly rate i = 1%).
This formula specifically calculates for an "annuity due," assuming your investment is made at the beginning of each period, which is common for SIPs.
An Example Calculation
Let's say your goal is to accumulate ₹25 Lakhs in 15 years with an expected annual return of 12%. To find the required monthly SIP:
- FV = 2,500,000
- n = 15 years × 12 months/year = 180 months
- i = 12% per year / 12 months = 1% per month (or 0.01)
Plugging these into the formula, our calculator finds that you would need to invest approximately ₹4,953 per month to reach your ₹25 Lakh goal. Our tool does this heavy lifting for you in an instant!