Compound Interest and Monthly SIP Calculator in PKR
A savings certificate and a mutual-fund statement both quote a yearly rate, but they pay it differently — and the difference is invisible until you see the finished number. Grow either a lump sum or a monthly instalment, at the compounding frequency your product actually uses, and see how much of the final figure is your own money.
| Period | You invested | Worth | Interest |
|---|---|---|---|
| After 0 years | Rs 500,000 | Rs 500,000 | Rs 0 |
| After 1 year | Rs 500,000 | Rs 563,413 | Rs 63,413 |
| After 2 years | Rs 500,000 | Rs 634,867 | Rs 134,867 |
| After 3 years | Rs 500,000 | Rs 715,384 | Rs 215,384 |
| After 4 years | Rs 500,000 | Rs 806,113 | Rs 306,113 |
| After 5 years | Rs 500,000 | Rs 908,348 | Rs 408,348 |
- Choose lump sum or monthly instalments — Lump sum mode compounds one amount you deposit today. SIP mode takes a monthly contribution, which is how a fund statement or a recurring deposit is written.
- Enter the rate per year — Use the annual rate even if the document quotes it monthly — 12% a year, not 1% a month. The quick chips cover the 8, 12, 15 and 20 percent figures usually seen on PKR products.
- Set the compounding frequency — In lump sum mode pick yearly, half-yearly, quarterly or monthly. More frequent compounding finishes ahead at the same quoted rate, which is why two deposits at “12%” can pay different amounts.
- Read the period table — Each row repeats your invested amount next to the value, so you can watch the interest line curve upward instead of trusting a single total.
- The years-to-double figure is computed exactly with logarithms and shown next to the rule of 72 shortcut, so you can see how close the shortcut is.
- SIP instalments are credited at the end of each month, matching how an expense summary is calculated rather than an advance annuity.
- Invested money and interest are always reported separately, because that ratio is the honest test of how the plan performs.
- No assumptions are hidden: the formula used is printed under the result so you can reproduce it in a spreadsheet.
Compound Interest & SIP — questions
What is compound interest in one line?
You earn interest on interest. Each period the new interest is added to the balance, so the next period calculates on a bigger number. Simple interest keeps the base fixed and therefore always finishes lower over the same years.
How much is Rs 500,000 at 12% for five years?
Compounded monthly it becomes about Rs 908,348 — Rs 408,348 of that is interest. Compounded yearly the same rate gives about Rs 881,171, roughly Rs 27,178 less. The quoted rate is identical in both cases, which is exactly why the compounding frequency has to be read off the document.
How is a monthly SIP calculated?
Each instalment compounds for its own number of months, so the first contribution grows longest. Adding them together gives the same answer as the annuity total: Rs 10,000 a month at 12% a year for five years is about Rs 816,697 from Rs 600,000 invested.
What is the rule of 72 and how accurate is it?
Divide 72 by your yearly rate to estimate the doubling time: at 12% it says six years, and the exact logarithmic answer is 6.12. It is a good sanity check at ordinary rates and drifts more at very high ones, which is why this tool shows both.
Does inflation matter here?
Yes, and it is the part these tables leave out. A plan that doubles your money in six years is only a real gain if prices rose less than that over the same period, so compare the future value against an inflation estimate before calling it profit.
Is the shown return guaranteed?
No. Bank deposits and national savings certificates in Pakistan carry a published rate that the issuer can revise, and fund returns vary every year. The calculator only projects the number you typed; treat any assumed 15 or 18 percent as a scenario, not a promise.