Methodology - How Our Calculators Work (Formulas & Assumptions)
See the formulas and assumptions behind our calculators. Understand what we include, what we do not include, and how to interpret results before investing.
This page explains the math behind our calculators in plain English. We aim to be transparent so you can trust the numbers and understand the limits.
1) Lumpsum Growth (Compound Interest)
- We estimate future value using standard compounding: FV = P × (1 + r)^n.
- P is your initial amount, r is annual return (as a decimal), and n is years.
- This is an estimate. Real market returns vary year to year.
2) Inflation-Adjusted (Real) Returns
- To show purchasing power, we adjust nominal returns by inflation.
- A simple way to think about it is: real return ≈ nominal return − inflation.
- For more accurate compounding, we use a real growth factor based on (1 + nominal) / (1 + inflation).
3) SIP and SWP Calculations
- SIP estimates assume a fixed monthly investment and a constant expected return rate.
- SWP estimates assume a fixed monthly withdrawal and a constant expected return rate.
- These are planning tools. They do not predict actual fund performance.
What We Do NOT Include
- Taxes, exit loads, fund expense ratios, and platform fees (unless explicitly stated).
- Irregular cash flows, changing return rates, or timing-specific market shocks.
- Personal suitability advice. We do not recommend products.
Assumptions (Quick List)
- Returns are estimates, not guarantees.
- Return rate is constant for the whole period (for simplicity).
- Inflation rate is constant for the whole period (for simplicity).
Last updated: 2025-12-17