Mutual Fund SIP Returns Calculator

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Published: May 10, 2013 at 6:00 am

Last Updated on December 1, 2021

Use this suite of calculators to compute SIP and lump sum returns, compute SIP corpus and determine SIP amount needed for a goal. This represents an upgrade of my understanding of (a) excel functions and (b) the compounding process. The calculators also help illustrate a common error in converting monthly  returns to annual returns.

First some yada yada  (to borrow a phrase fromGoogle toolbar) if you don’t mind. Every since the blog got reasonably popular (for my standards) kind readers have called me a ‘Excel expert’ much to my embarrassment. Nothing is farther from the truth. The truth is  I use Excel because it is the only platform accessible to everyone. These calculators can be written in many platforms routinely used for physics research with much better efficiency. Truth is I am still unfamiliar with many Excel functions. I manage because, thanks to my training, I have realized that all of investment and amortization math stems from a single master equation. All one needs is high school algebra to manipulate the master equation to different situations. The Excel functions like FV, PV, IPMT etc. do just this.

Unfamiliarity with Excel features has certain disadvantages: Until yesterday I didn’t know that computing SIP returns can be done in a single step using an Excel function called RATE! I had earlier made a SIP returns calculator in a roundabout way resulting in a 5 Mb file with a minor bug (now corrected)!

The only saving grace is this version (post bug-fix) always returns the correct annual return. Most SIP returns and SIP goal calculators suffer from one flaw: If the assumed annual return is 12% they assume the monthly return is 12%/12 = 1%. This is incorrect. The correct monthly return is = (1+12%)1/12 -1 = 0.949%. You may think this is a small difference. However when computing SIP corpus for a long tenure and when computing annual SIP returns (long and short tenures) it can make quite a big difference.


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That said the correct return can easily be computed from the result of the RATE function. The roundabout method I have used might be of some interest/use to enthusiasts, developers and planners.

So I present two versions of the SIP returns calculator:

Download the SIP-returns-investor-version

Contents: versatile SIP corpus calculator, goal planner, SIP and lump sum returns (CAGR) calculator

Download the SIP-returns-pro-version

Contents: investor version + my SIP CAGR calculator which directly returns the correct annual return

Thanks to Mr. Sukhvinder Sidhu for pointing out a minor bug in the description.

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Pattabiraman editor freefincalDr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over nine years of experience publishing news analysis, research and financial product development. Connect with him via Twitter or Linkedin or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation for promoting unbiased, commission-free investment advice.
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