Expense Ratio Calculator Online

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Expense Ratio Calculator

Expense Ratio Calculator

Expense Ratio is the future value of money and future value of an annuity. The Expense Ratio is Initial Investment or our first deposit. Yearly periodic investment or the money we invest every year. Duration of investment or the amount of time we will leave our money to grow. Effective investment return whichnwill represent the real compounding rate our investment will have, discounting fees.

let us consider,

  • I0 = Initial investment, or our first deposit;
  • PI= Yearly periodic investment or the money we invest every year;
  • n = Duration of investment, or the amount of time we will leave our money to grow;
  • n = Effective investment return which will represent the real compounding rate our investments will have, discounting fees;
  • r expected = Expected investment return, based in the historical performance of the ETF; and
  • Er= Expense ratio.

Formula for Initial investment future value (FVI):

FVI = I0 * (1 + reffective)n
Where:

  • reffective = rexpected – Er,

  The future value of the total investment (FVTI)

FVTI = FVI + FVPI

Periodic investment future value (FVP).

Calculate Expense Ratio 

  1. initial investment (10,000$)
  2. Yearly periodic investment (3,00,000$)

expected yearly investment return (5%)

Expenses Ratio(0.65%)

Duration investment 2years,

future value of total investment (623,938.92$)

The total cost of ETF = 2086.08$

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