Finance
Monte Carlo Returns Simulator
Most calculators give you one number. Real markets give you a range. This simulator runs hundreds of return paths drawn from a normal distribution around your expected return and volatility, then shows the median, the 5th–95th percentile envelope, the full distribution of outcomes, and the probability of hitting your goal.
Equity ≈ 18-22%
Same seed = same result
Median outcome
Across 400 simulated paths over 20 years.
Probability of hitting goal
45.3%
Target ₹1,00,00,000
Pessimistic (5th)
₹36,83,460
Optimistic (95th)
₹2,43,15,430
Mean ending balance
₹1,10,26,101
Loss probability
1.5%
Below invested (₹25,00,000)
Each path applies a random monthly return drawn from a normal distribution. Reality has fat tails — actual extreme outcomes are usually worse than this model suggests. Use this as a planning aid, not a guarantee.
Peak: ₹3,84,48,646
Methodology
How we calculate this
- Each month draws from a Normal(μ_m, σ_m) where μ_m = annual / 12 and σ_m = annual / √12.
- The seed is fixed by default for reproducibility — change inputs to re-roll.
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Frequently asked
- Why don't real returns look smooth like a SIP calculator?
- A SIP calculator assumes constant returns. Real markets are volatile — some years up 30%, others down 20%. Monte Carlo respects this volatility, which is why the range of outcomes is so wide.
- Is the 'probability of hitting goal' a guarantee?
- No. The model assumes returns are normally distributed, which underestimates extreme tails. Treat the probability as a planning aid, not a guarantee.
- What volatility should I use?
- Indian equity ≈ 18–22% annual std dev. A balanced 60/40 portfolio ≈ 11–13%. Pure debt funds ≈ 3–5%.
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