Investment Fee & Compounding Lab.
Explore the long-run effect of annual fund expenses in two hypothetical investments. Adjust the assumptions, compare outcomes, and learn why small recurring costs can matter over time. No account or market data required.
Compare two annual expense ratios.
Enter fictional assumptions, then select Calculate. The example uses a fixed annual gross return, monthly contributions at the end of each month, and an annual expense ratio modeled as a proportional monthly deduction. It is deliberately simplified.
Comparing fund expenses
Select Calculate to see the hypothetical comparison.
What the model assumes—and omits.
What is included
The same hypothetical gross annual return for both funds; a constant proportional annual fund expense; monthly contributions at month-end; monthly compounding; identical starting and contribution amounts.
What is not included
Taxes, commissions, bid–ask spreads, account or advisory fees, inflation, changing expense ratios, market volatility, dividends with distinct tax treatment, contribution timing differences or real-world tracking error.
The calculation
Each month, the model applies a gross growth factor of (1 + annual gross return)1/12, then a fee factor of (1 − annual expense ratio)1/12, before adding that month’s contribution. Each fee percentage is converted from percent to a decimal. This is a teaching approximation, not a replication of any fund’s actual daily fee accrual or performance.
Important: A lower modeled fee produces a higher balance when every other assumption is identical. That does not establish which real-world investment performs better, is safer, or suits a specific investor. Negative market returns and losses are possible, and a steady return is not realistic.
Understand the costs behind the numbers.
SEC Investor.gov
Learn about the cumulative effects of investment fees and how fund expenses appear in investment disclosures.
How fees affect your portfolio →FINRA Fund Analyzer
For an actual fund comparison, use official current fund details and a dedicated cost tool rather than invented data.
Explore the FINRA Fund Analyzer →Read the disclosures. Then question the assumptions.
Use the ETF research worksheet to compare published fees and holdings, then take the five free lessons in ETF Research Lab.
This calculator is educational, hypothetical and does not use live prices, actual funds, or personal financial data. It is not investment, tax or legal advice or a forecast of results. A fund’s prospectus and current disclosures control its actual fees and risks. SignalCrest disclosures.