🔢 Complete Formula Transparency

How We Calculate – All Formulas Explained

At SIPCalculators.in, we believe in complete transparency. Here are the exact mathematical formulas used in every calculator on our site.

📈 SIP Calculator Formula (AMFI Standard)

M = P × ({[1 + i]^n – 1} / i) × (1 + i)
Where: i = (1 + r)^(1/12) − 1 (monthly rate from annual), P = monthly SIP amount, n = tenure in months, r = annual return rate

We use the correct AMFI-standard formula which derives monthly rate using (1+r)^(1/12)−1 — NOT r/12 which is a common simplification error. This gives more accurate results aligned with how mutual fund NAVs actually compound.

Example: ₹5,000/month at 12% for 10 years: i = (1.12)^(1/12)−1 = 0.009489, n=120, M = ₹11,61,695

🏦 FD Calculator Formula (Quarterly Compounding)

M = P × (1 + r/4)^(4×n)
P = principal, r = annual rate (decimal), n = years, 4 = quarterly compounding

Most Indian banks compound FD interest quarterly. We use 4 as the compounding frequency unless specified otherwise.

🏛️ PPF Calculator Formula (Annual Compounding)

Balance(yr) = (Balance(yr−1) + Deposit) × (1 + r)
Applied year by year. r = PPF interest rate (7.1% currently). Note: PPF interest is calculated on the lowest balance between 5th day and last day of each month.

🏠 EMI Formula (Reducing Balance)

EMI = P × r × (1+r)^n / [(1+r)^n – 1]
P = loan principal, r = monthly interest rate (annual rate/12/100), n = loan tenure in months

📊 XIRR Formula

XIRR uses numerical root-finding to solve: Σ[Cash_Flow_i / (1 + XIRR)^(Date_i / 365)] = 0. We use the Newton-Raphson method with 100 iterations for convergence. Initial estimate: 10%. Tolerance: 0.0001%.

📐 Real Return (Fisher Equation)

Real Return = ((1 + Nominal) / (1 + Inflation)) – 1
Used in Real Returns Calculator and Inflation Calculator pages.

⚠️ Important Disclaimer

All calculations on SIPCalculators.in are estimates based on the assumed return rates entered. Actual mutual fund returns vary and are not guaranteed. Past performance does not guarantee future results. FD rates change frequently — verify with your bank. Tax calculations are based on published CBDT rules for FY 2025-26 and may change. For financial decisions, consult a SEBI-registered investment advisor.

Questions? Contact us or email myself@sipcalculators.in

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SIP CalculatorXIRR CalculatorFinancial GlossaryFD CalculatorReal ReturnsEMI Calculator
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