Vijay,
Very good question.
There is no simple formula for calculating Returns of SIP. You have to do long calculations with calculator or use a computer program written for this purpose.
SIP returns may be calculated as below -
(Assuming SIP is monthly and take 30 days per months)
Final Value of Investment = Monthly investment * ([(1+ R)**N - 1]/R) * [(1+ R)**M]
whrere -
N - No of monthly Installments paid
M - Remaining days after date of payment of last installment / 30
R - Monthly Rate of return
R can be found out only by trial and error either manulaly or by a program.
Single Star - Multiply
Double Star - Raise to the power of
e.g 4 ** 2 = 16 and 25 ** 1/2 = 5
Originally Posted by CONFUSED
Vijay,
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