Index Fund Fees
Measure how much expense ratios reduce long-term growth.
About Index Fund Fees
An expense ratio is deducted from returns every year, so over decades it compounds into a large drag on final value. Even a one-percent difference in fees can cost a meaningful share of ending wealth. Fees are one of the few investment costs fully within your control, making low-cost index funds a powerful default choice.
Formula
Index Fund Fees
With fees = P x (1 + (r - fee))^years
- fee
- annual expense ratio
- r
- annual return
Worked example
With the default values below, Index Fund Fees returns Growth Without Fees of $76,122.55. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Initial balance
- 10,000
- Annual returnaccepts 0–100 %
- 7 %
- Yearsminimum 0
- 30
- Expense ratioaccepts 0–10 %
- 0.5 %
Results
- Growth Without Fees
- $76,122.55
- Growth With Fees
- $66,143.66
- Cost of Fees
- $9,978.89
- Fee Impact
- 13.11%
Step by step
- 1Values used
- 2Index Fund Fees
- 3Growth Without Fees= 76,122.55
- 4Growth With Fees= 66,143.66
- 5Cost of Fees= 9,978.89
- 6Fee Impact= 13.11
Assumptions and limits
- The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation or tax into account.
- Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
- This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Frequently Asked Questions
How is Index Fund Fees calculated?
With fees = P x (1 + (r - fee))^years An expense ratio is deducted from returns every year, so over decades it compounds into a large drag on final value. Even a one-percent difference in fees can cost a meaningful share of ending wealth.
Why does Index Fund Fees matter?
Fees are one of the few investment costs fully within your control, making low-cost index funds a powerful default choice.
What values do I need to enter?
This calculator takes 4 inputs: Initial balance, Annual return, Years, Expense ratio. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.