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Calculation Machine

Expense Ratio Cost Calculator

See the long-term cost of a fund's expense ratio.

Reviewed by James Whitfield · How we check our maths

Your values

ⓘ Live results

Results
Fund A ending value (0.9% fee)
$277,783.71
Fund B ending value (0.05% fee)
$338,482.46
Total cost of higher fees
$60,698.75
Percent of Fund A's growth lost to fees
21.04%

Quick answer

A small difference in expense ratio compounds into a large dollar cost over long holding periods, since fees are deducted from your returns every single year.

The formula

Cost drag compounds like a negative return applied annually to the account balance

Worked example

Worked example

Using the values the calculator loads with.

Inputs

  • Starting investment50000 $
  • Years invested25 years
  • Gross annual return8 %
  • Fund A expense ratio0.9 %
  • Fund B expense ratio0.05 %

Result

  • Fund A ending value (0.9% fee)$277,783.71
  • Fund B ending value (0.05% fee)$338,482.46
  • Total cost of higher fees$60,698.75
  • Percent of Fund A's growth lost to fees21.04%

How to use the Expense Ratio Cost Calculator

  1. 1Enter your starting balance and how long you'll stay invested.
  2. 2Enter the gross return you expect before fees.
  3. 3Compare two expense ratios to see the dollar impact over your time horizon.

Frequently asked questions

Why does a 1% fee matter so much?

Fees compound against you every year, just as returns compound for you — small annual drags snowball over decades.

What's a reasonable expense ratio?

Many broad index funds charge under 0.10%, while actively managed funds often charge 0.5-1.5% or more.

About this calculator