How the SIP + Lumpsum Calculator works
Many investors do not choose between a one-time lumpsum and a monthly SIP (Systematic Investment Plan) — they use both: an initial deposit followed by regular contributions. This calculator projects the combined future value of both streams under one assumed annual rate of return, so you can see the total maturity value, how much came from each source, and how much of that total is investment gains versus your own money.
The two formulas
The lumpsum portion compounds with the standard compound-interest formula: FVlumpsum = L × (1 + i)n, where L is the lumpsum amount, i is the periodic rate of return, and n is the number of periods.
The SIP portion uses the annuity-due future value formula, since each installment is assumed to be invested at the start of its period rather than the end: FVSIP = SIP × [((1 + i)n − 1) / i] × (1 + i).
In this calculator, i is the annual return divided by 12 (a monthly rate) and n is the investment duration in years multiplied by 12 (total months). The two future values are simply added: Total maturity value = FVSIP + FVlumpsum. If the expected return is entered as 0%, both formulas reduce to simple addition with no growth.
Worked example
Take a $100,000 lumpsum plus $5,000 invested every month, both growing at an expected 12% annual return for 10 years (i = 1% per month, n = 120 months). The SIP grows to roughly $1,161,695 and the lumpsum grows to roughly $330,039, for a total maturity value near $1,491,734. Total money put in is $700,000 ($600,000 of SIP installments plus the $100,000 lumpsum), so the estimated return is about $791,734 — more than the amount invested, illustrating how compounding accelerates over a long horizon.
What moves the result most
- Time in the market: because growth compounds monthly, extending the duration has an outsized effect — doubling the years more than doubles the total maturity value at a positive rate of return.
- Expected annual return: a small change in the assumed rate compounds into a large difference over long durations; try the calculation at a few percentage points above and below your base assumption.
- SIP amount versus lumpsum size: a larger lumpsum benefits the most from long durations since the entire sum compounds from day one, while SIP installments each compound for a shorter (and different) length of time.
Assumptions and limitations
This calculator assumes a single constant rate of return for the full period, monthly compounding, and SIP installments made at the start of each month (the standard annuity-due convention most SIP calculators use). It does not model fund expense ratios, transaction costs, taxes on capital gains, inflation, or the reality that investment returns fluctuate year to year rather than staying fixed. Treat the output as an illustrative projection for planning, not a guaranteed or promised return.