Expense Ratio Calculator
See what a fund's expense ratio really costs you. Enter your investment and the expense ratio for the first-year fee, then add a return and time horizon to project the total fees paid and the drag on your balance.
How to calculate the cost of an expense ratio
- Enter the amount you have invested in the fund.
- Enter the fund's annual expense ratio as a percent.
- Optionally add an expected return and number of years to project total fees.
Examples
10,000 invested with a 0.5% expense ratio
investment 10,000, expense ratio 0.5%, return 7%, 30 years
First-year cost 50, total fees about 9,979 over 30 years
Frequently asked questions
What is an expense ratio?
An expense ratio is the annual fee a fund charges, shown as a percent of the assets you hold. A 0.5 percent expense ratio costs 5 dollars per year for every 1,000 dollars invested, deducted from the fund's returns.
How is the first-year cost calculated?
The first-year cost is your investment multiplied by the expense ratio divided by 100. For example, 10,000 dollars at a 0.5 percent expense ratio is 50 dollars in fees for that year.
How does this calculator project long-term fees?
It grows your balance each year at the return minus the expense ratio, and separately at the full return with no fee. The gap between the two ending balances is the total cost of the expense ratio over time.
Why do small expense ratios matter so much?
Because the fee is charged every year on a compounding balance, a small percentage adds up. Over decades, a fraction of a percent can cost thousands of dollars in foregone growth, not just the fees themselves.
Is the projection exact?
No. It assumes a steady annual return and a constant expense ratio, which real funds do not deliver. Treat it as an estimate of the long-term drag rather than a precise forecast.
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