1. What is SIP with Incremental Investment?

A Systematic Investment Plan (SIP) with incremental investment is a method of investing a fixed amount regularly in mutual funds, with the amount increasing over time. This calculator helps estimate the future value of such investments considering compound growth.

2. How Does the Calculator Work?

The calculator uses the SIP with incremental investment formula:

Where:

• \( P \) — Monthly investment amount
• \( Rate \) — Expected annual return rate (converted to monthly)
• \( n \) — Total number of months (years × 12)

Explanation: The formula accounts for monthly compounding and assumes each investment is made at the beginning of the month.

3. Importance of SIP Calculation

Details: Calculating the future value helps in financial planning, setting realistic investment goals, and understanding the power of compounding over time.

4. Using the Calculator

Tips: Enter your monthly investment amount, expected annual return rate, and investment period in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between regular SIP and incremental SIP?
A: Incremental SIP assumes your monthly investment amount increases over time, while regular SIP assumes fixed monthly investments.

Q2: Is the return rate guaranteed?
A: No, the return rate is an assumption based on historical performance. Actual returns may vary.

Q3: How often is the interest compounded?
A: This calculator assumes monthly compounding, which is common for SIP investments.

Q4: Can I change my monthly investment amount?
A: Yes, most SIP plans allow you to increase your investment amount periodically.

Q5: Are taxes considered in this calculation?
A: No, this is a pre-tax calculation. Actual returns may be lower after accounting for taxes.