Investment Returns Calculator

What this calculator does

Three things decide what an investment becomes: how much goes in, how long it stays, and what it earns while it is there. This calculator takes all three and shows the result as a projection rather than a single number — the amount you contributed, the growth on top of it, and the point in the timeline where the growth starts to outweigh the contributions.

It handles the three shapes an Indian investor usually needs. A lump sum, where one amount is invested and left. A monthly investment or SIP, where a fixed amount goes in every month. And a step-up SIP, where that monthly amount rises each year — usually because income has. You can combine them: an initial amount plus a monthly one is a common enough pattern that the calculator treats it as ordinary rather than special.

The output separates two figures people routinely conflate. Absolute return is the growth as a share of what you invested; it takes no account of how long the money was invested, so 60% over three years and 60% over thirty are the same number. Annualised return is the rate per year, and for anything other than a lump sum it cannot be found by dividing — which is the subject of the methodology below.

How to use it

1. Enter a one-time amount if you are investing a sum now. Leave it at zero for a pure SIP projection.
2. Enter a monthly amount if you will invest every month. Leave it at zero for a pure lump sum projection.
3. Set the duration — how long the money stays invested, in years.
4. Set an expected return. This is your assumption. Use a figure you can defend for the asset you actually hold, not the best year it ever had.
5. Add a step-up if you intend to raise the monthly amount each year. Leave it at zero if not.

Everything recalculates as you move a slider or type. Nothing is sent anywhere — the arithmetic runs in your browser and no figure you enter leaves your device.

The formulas used

Money compounds monthly. The monthly rate is derived from the annual rate you enter as:

i = (1 + r)1/12 − 1

This matters more than it looks. Many calculators use i = r ÷ 12, which treats your figure as a nominal rate compounded monthly and quietly returns more than advertised — 12% becomes 12.68% effective over a year. Deriving the monthly rate the way above means the number you type is the number you get, and a lump sum grows to exactly P(1 + r)n.

A lump sum over n years:

FV = P × (1 + r)n

A monthly investment of A made at the start of each month, over N months — an annuity due:

FV = A × (1 + i) × [((1 + i)N − 1) ÷ i]

With a step-up the monthly amount is not constant, so there is no single closed form. The calculator steps through month by month, raising the contribution by the step-up percentage on each anniversary.

On the annualised figure. For a lump sum this is the CAGR, and it comes back to the rate you assumed. For anything with monthly contributions, CAGR is not available: money invested in the final year has not been invested for the full term, so there is no single holding period to annualise. Computing (value ÷ invested)1/n − 1 — which is what many pages label CAGR for a SIP — badly understates the return, because it pretends every rupee was there from the start. This calculator instead solves for the money-weighted return (XIRR) across the actual cash flows, which accounts for when each contribution was made.

A worked example

Take ₹10,000 a month for 10 years at an assumed 12% a year, with no step-up and no initial amount.

• You contribute ₹10,000 × 120 months = ₹12,00,000.
• The monthly rate is (1.12)1/12 − 1 ≈ 0.9489%.
• The projection reaches roughly ₹22.4 lakh, so growth is about ₹10.4 lakh.
• Absolute return is about 87% — the growth divided by what you put in.
• The annualised return is 12%, the rate assumed, because every rupee compounded at it. Note that the naive calculation, ₹22.4 lakh ÷ ₹12 lakh to the power one-tenth, gives about 6.4% — roughly half the real figure, and a good illustration of why that formula should not be used for a SIP.

Add a 10% annual step-up to the same inputs and the contributions rise to ₹23,579 a month by year ten. Both the invested amount and the final value rise; the annualised return does not, because the rate assumed has not changed.

What it does not include

The figures are before tax, before costs and in nominal rupees. Gains on equity investments attract capital gains tax when you redeem; a fund's expense ratio reduces returns every year; and inflation reduces what the final sum will buy. A steady annual return is also a modelling convenience — real markets do not deliver the same figure every year, and the order in which good and bad years arrive matters more than most projections admit. Nothing here is a recommendation to buy or hold anything.

Frequently asked questions

How is the investment return calculated?
Money compounds monthly. The monthly rate is derived from the annual rate you enter as (1 + r)^(1/12) − 1, so the figure you type is the effective annual return rather than a nominal one. Each monthly contribution is added at the start of its month and compounds from there.

What is the difference between absolute return and CAGR?
Absolute return is simply the growth as a percentage of what you put in — it says nothing about how long that took. CAGR is the annual rate at which a single sum would have to grow to reach the final value, so it only describes a lump sum left for the whole period.

Why is CAGR not shown for a SIP?
Because there is no single holding period to annualise. Money you invest in the last year has not been invested for the full term, so dividing the total growth across the whole period understates the return badly. The calculator shows the money-weighted annualised return (XIRR) instead, which accounts for when each rupee actually went in.

What does the step-up option do?
It raises your monthly investment once a year, on each anniversary, by the percentage you set. A 10% step-up on ₹10,000 a month means ₹11,000 in year two and ₹12,100 in year three. It does not change the monthly amount within a year.

Does this calculator account for tax, inflation or fees?
No. The figures are before tax, before fund expenses and in nominal rupees. Equity gains attract capital gains tax on redemption, fund expense ratios reduce returns each year, and inflation reduces what the final amount will buy. Deduct those separately.

Is the expected return a prediction?
No. It is an assumption you supply and the calculator applies arithmetically. Actual market returns vary year to year and can be negative; a steady rate is a modelling convenience, not a forecast.

Can I use this as a lump sum or SIP calculator on its own?
Yes. Leave the monthly amount at zero for a pure lump sum projection, or leave the lump sum at zero for a pure SIP. Filling in both projects them together.