Mutual Fund Calculator
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What Your Result Means
- Total Value: The projected balance after the expense ratio is deducted each year. This is the amount you would actually have in your account at the end of the investment period, assuming constant returns.
- Total Contributions: The sum of your initial investment plus all monthly contributions over the full period — the money you personally put in, before any growth.
- Total Growth: The net gain from compounding after fees are removed. This is your total value minus your total contributions — the return your money generated for you.
- Cost of Fees: The dollar difference between what you would have earned at the gross return and what you actually keep after the expense ratio. Even a small percentage difference compounds dramatically over decades.
How This Calculator Works
You enter an initial lump sum, a monthly contribution, an expected annual return, an expense ratio, and a holding period in years. The tool computes the future value twice — once at the gross return rate and once at the net rate (gross minus expense ratio) — using the standard future-value formula with monthly compounding. The difference between the two is the lifetime dollar cost of fees. It assumes constant returns, no taxes, no inflation adjustment, and no fund distributions or rebalancing.
Quick Questions
What is a good expense ratio?
Index funds and ETFs typically charge 0.03%–0.20%. Actively managed funds generally charge 0.50%–1.50%. A difference of even 0.5% can cost tens of thousands of dollars over a 30-year investment horizon due to compounding.
Does this include taxes on gains?
No — this calculator projects pre-tax growth. In a taxable account, capital gains distributions and eventual withdrawals would reduce your net return. Tax-advantaged accounts (401k, IRA) defer or eliminate some of that drag.
What expected return should I use?
A broad U.S. stock index has historically returned roughly 7%–10% annually before inflation. A balanced stock/bond portfolio is typically lower (5%–7%). Use a conservative estimate and remember that past performance does not guarantee future results.
Is the expense ratio charged all at once?
No — the fund deducts the expense ratio gradually from the fund's net asset value throughout the year. You never see a line-item charge; it's reflected in a slightly lower daily return compared to the gross return of the underlying assets.
How does compounding make fees so costly?
Fees reduce your balance each year, so you earn less on a smaller base the next year. Over 30 years, a 1% expense ratio on a $10,000 investment growing at 7% can cost over $30,000 in lost growth — nearly three times the original investment.
Sources
- SEC — Mutual Funds and ETFs Guide (expense ratios, fee disclosures, investor protections)
- Investor.gov — Compound Interest Calculator (SEC compound growth reference)
- Bogleheads — Expense Ratios (practical guide to understanding fund costs)
Method & review
Estimate only. Results reflect your inputs and standard formulas. Double-check important decisions independently.