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Next toolsAssumptions and methodology
Transparent calculation notes for Wealth Calculator.
Formula used
The lump sum compounds once a year at the rate you enter. SIP instalments use the SIP Calculator's convention: 12% is split into 1% a month, about 12.68% a year once compounded. Method updated October 2026: lump sums now compound once a year, matching the Lumpsum calculator.
Methodology
- Grow the lump sum at the expected annual return, compounded yearly.
- Invest each monthly SIP at the start of the month and grow it at one-twelfth of the annual return per month.
- Add both parts each year and find the first year the total reaches the target.
- Divide the total by (1 + inflation)^years for its value in today's money; a target in today's money grows by inflation each year before it is compared.
Core assumptions
- Return rate remains constant.
- Contributions are made as entered.
- No withdrawals occur during the projection.
- Inflation stays at the rate you enter.
Not included
- Taxes, fees, asset allocation changes and market volatility are not modelled. Inflation is used only for the value in today's money and, when you choose, to grow the target.
- Actual wealth outcomes can differ materially.
About Wealth Calculator
Guide1What is a Wealth Calculator?
A Wealth Calculator helps you project the future value of your investments based on your current savings, regular contributions, and expected returns. It provides a comprehensive view of how your wealth will grow over time, taking into account the power of compounding.
Whether you are saving for a specific goal like buying a house, funding education, or building a retirement corpus, a wealth calculator helps you determine if you are on track and how much more you need to invest.
2How Wealth Accumulation Works
Wealth accumulation is driven by three key factors:
- Initial Capital: The amount you start with (lump sum investments, existing savings)
- Regular Contributions: Monthly or annual additions to your investment portfolio
- Rate of Return: The growth rate of your investments, which varies by asset class
The formula for future wealth is a combination of lump sum compounding and annuity (regular contribution) compounding, applied over your chosen time horizon.
3Wealth Growth Formula
Future Wealth = P × (1 + R)^Y + M × [((1 + r)^n − 1) / r] × (1 + r)
- P = Lump sum invested today
- R = Expected annual return
- Y = Number of years
- M = Monthly SIP, invested at the start of each month
- r = R ÷ 12, the monthly rate
- n = 12 × Y, the number of monthly instalments
The lump sum compounds once a year at the rate you enter (as in the Lumpsum calculator). SIP instalments use one-twelfth of the rate each month: 12% becomes 1% a month, about 12.68% a year once compounded (as in the SIP calculator). Example: ₹5 lakh plus ₹10,000 a month at 12% for 15 years grows to about ₹77.83 lakh (₹27.37 lakh from the lump sum and ₹50.46 lakh from the SIP).
Method updated October 2026: lump sums now compound once a year, matching the Lumpsum calculator.
4How to Use This Wealth Calculator
- Step 1: Enter your current savings or investment value
- Step 2: Input your monthly contribution amount
- Step 3: Set the expected annual return and time period
- Step 4: View the projected wealth, contribution breakdown, and growth trajectory