How fees are applied
The tool grows the starting balance by the assumed gross annual return, then deducts the annual percentage fee from that grown balance. It repeats that process once per year for each option.
Enter the return and fee as decimals in the formula. This annual deduction convention is an illustration. Actual products can accrue expenses daily or use different fee arrangements.
A worked fee comparison
Start with $100,000, assume a 6% gross annual return, and compare a 0.2% annual fee with a 1% fee for 20 years. Under this calculator’s year-end deduction convention, Option A finishes at $308,125.85, and Option B finishes at $262,313.84. The ending-value gap is $45,812.01.
The gap is not simply the sum of extra fees paid. Money deducted earlier also misses future compounding.
Read the full fee schedule
Compare transaction costs, ongoing expenses, and any fixed or performance-based charges. The fee percentages entered here do not capture every possible cost.
Investor.gov explains how fees reduce the amount of money available to earn returns. This calculator isolates fee arithmetic; it does not assess the quality or suitability of either option.
Frequently asked questions
Why is the difference larger than the extra fees charged?
Fees remove money that could otherwise remain invested. The ending-value gap therefore includes the effect of lost compounding as well as the deductions.
What if Option B has the lower fee?
The calculator compares the numbers you enter and identifies whichever option finishes ahead. The letters A and B do not imply a recommendation.
Should I enter a return already reported after fees?
Use a gross return assumption before the modeled fee. Deducting the same expense again from a return that already includes it would double-count the cost.
Published by investor.wtf. Read the formulas, assumptions, and how these pages are made.