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A systematic investment plan invests a fixed sum each month, so each instalment compounds for a different length of time. Treating the stream as an annuity due gives the maturity value, and the gap over the amount invested is the compounding effect.
SIP maturity
FV = P × [((1+r)^n - 1)/r] × (1+r)
Figures are estimates for planning only. Market returns are not guaranteed, and rates, limits and tax rules change. This is not financial or tax advice — speak to a qualified adviser before acting.
Early instalments compound for the entire term. Over 15 years at 12% the gain typically exceeds the amount invested.
It averages the purchase price, which reduces timing risk, but the value at maturity still depends on markets.