Estimate how an annual fund expense ratio affects investment growth over time.
Expense Ratio Calculator
Form
Results
Future value of total investment
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Total cost of ETF
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Table of Contents
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What is Expense Ratio?
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How to Use This Calculator
- Enter or select Initial investment, Yearly investment, Duration, Expected return, Expense Ratio.
- Check the unit beside each measurement. For a percentage or rate, use the scale and time period stated in the form.
- Choose Calculate, then compare the output with the formula and example below. If you change a value or option, calculate again to update the result.
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Formula Used
Approximate net annual return = assumed gross return−annual expense ratio
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Variables Explained
| Input | What it means |
|---|---|
| Initial investment | The starting capital outlay before any separately entered fees or future contributions. |
| Yearly investment | Use the measured or stated value for this item, with the unit or category shown beside the field. |
| Duration | The length of the measurement or reporting interval, in the selected unit. |
| Expected return | Use the measured or stated value for this item, with the unit or category shown beside the field. |
| Expense Ratio | Use the measured or stated value for this item, with the unit or category shown beside the field. |
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Worked Example
A 10,000 balance with 6% gross return and 1% expenses grows at roughly 5% before other costs.
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Why Use This Calculator?
Compare the result with the underlying statement, budget or proposed transaction. It is most useful when every amount uses the same reporting period and the same accounting definition.
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Common Mistakes
- Actual fees may be accrued daily, and platform or transaction charges can be additional.
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Frequently Asked Questions
Should I use monthly or annual figures?
Use one consistent period for every amount and rate in the relationship. If a form specifies an annual rate or a monthly amount, follow that label rather than mixing time periods.
Does the result include fees and tax?
Only the costs and taxes represented by the inputs and formula are included. A real transaction can include other charges, so compare the estimate with the underlying agreement or statement.
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Sources & References
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