These investors can use a formula to find out the future value of their SIP investments. This formula gives a rough idea of how the monthly investments will grow over a period of five years.
Future Value (FV) = P [ (1+i)^n-1 ] * (1+i)/i
In this formula:
FV = Future value or the amount you get at maturity.
P = Amount you invest through SIP
i = Compounded rate of return
n = Investment duration in months
Example, A is investing in a mutual fund scheme through a monthly systematic investment plan (SIP) of Rs 10,000 for an investment period of 10 years with an expected rate of return of 10%.
![MF 1 MF 1](https://www.businessfast.co.uk/wp-content/uploads/2024/04/Technical-Breakout-Stocks-Record-highs-How-to-trade-Tejas-Networks.jpg)
The future value of this investment will be Rs 20.48 lakh after 10 years.
Example, A is investing in a mutual fund scheme through a monthly systematic investment plan (SIP) of Rs 10,000 for an investment period of 10 years with an expected rate of return of 12%.
![MF2 MF2](https://www.businessfast.co.uk/wp-content/uploads/2024/04/Technical-Breakout-Stocks-Record-highs-How-to-trade-Tejas-Networks.jpg)
The future value of this investment will be Rs 23 lakh after 10 years.
Example, A is investing in a mutual fund scheme through a monthly systematic investment plan (SIP) of Rs 10,000 for an investment period of 10 years with an expected rate of return of 15%.
![MF3 MF3](https://www.businessfast.co.uk/wp-content/uploads/2024/04/Technical-Breakout-Stocks-Record-highs-How-to-trade-Tejas-Networks.jpg)
The future value of this investment will be Rs 27.52 lakh after 10 years.