How a SIP calculator actually compounds your money

A SIP (Systematic Investment Plan) projection isn’t a lump sum growing at one annual rate — it’s a fixed amount invested every month, with each month’s contribution compounding for a different length of time.

The mechanics: convert your annual rate to a monthly rate, then each month add that month’s SIP to the running balance and grow the whole thing by the monthly rate — balance = (balance + monthly) × (1 + monthly_rate). Repeat for every month in the tenure. Money invested in month 1 compounds for the full term; money invested in the last month barely compounds at all — which is why starting early matters more than the rate itself, for the same total invested.

TryCalculatingNow’s SIP calculator also models an optional yearly step-up — increasing your monthly SIP by a fixed percentage every 12 months, which is closer to how most people actually invest as income grows. All computed in your browser; nothing is uploaded.