A Systematic Investment Plan (SIP) invests a fixed amount in a mutual fund every month. Because each instalment earns returns that are then reinvested, your money compounds over time. The estimate above uses the standard SIP future-value formula M × ((1+i)ⁿ − 1) ÷ i × (1+i), where M is the monthly amount, i the monthly return (annual ÷ 12 ÷ 100) and n the number of instalments.
Mutual fund returns are not guaranteed — the expected return you enter is only an assumption. Longer time periods and disciplined monthly investing are what make SIPs powerful, thanks to compounding.