# What does my expense ratio cost?

Works out what a fund’s expense ratio costs in dollars over the years you hold it: the fees taken, the growth they would have earned, and the gap to a cheaper fund.

- Page: https://www.acalculator.org/finance/expense-ratio-calculator
- JSON spec: https://www.acalculator.org/finance/expense-ratio-calculator.json
- Version: 52f7dbabe7b7

## Default answer

Example with the default inputs (Amount invested $10,000.00, Added each year $0.00, Yearly return before fees 7%, Expense ratio 0.5%, Compare with an expense ratio of 0.05%, Years held 20): An expense ratio of 0.5% on $10,000.00 costs you $3,691.27 over a 20-year hold.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| amount | Amount invested | What you put in the fund at the start. |
| add | Added each year | Optional: what you add at the end of each year. |
| rate | Yearly return before fees | The return the fund’s investments earn each year before the expense ratio. It stays the same every year. |
| er | Expense ratio | The fund’s yearly operating expenses as a percent of its assets, from its prospectus. |
| er2 | Compare with an expense ratio of | Optional: a second fund’s expense ratio, such as a low-cost index fund. |
| years | Years held | How many whole years you keep the money in the fund. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| cost | What the expense ratio costs you | The balance with no fee minus your balance: the fees plus the growth the fees would have earned. |
| balance | Your balance | The balance at the end, after every fee. |
| noFee | With no fee | The same money with an expense ratio of 0%. |
| fees | Fees taken | All the yearly fees added up. |
| lostGrowth | Growth lost to fees | What it costs you minus the fees taken: the return the fee money would have earned. |
| firstFee | Fee in the first year | The fee taken at the end of year 1. |
| otherBalance | Balance at the other expense ratio | The same money at the comparison expense ratio. |
| saved | Difference to the other fund | The other fund’s balance minus yours. Negative when the other fund costs more. |

## Method

Each year: grown = balance × (1 + return); fee = grown × expense ratio; balance = grown − fee + yearly addition. With no fee: balance × (1 + return) + addition. Cost = no-fee balance − your balance.

## Assumptions

- The return and the expense ratio stay the same every year, and the fee is taken once a year from the value after the year’s growth. Funds take it a little each day, which gives almost the same result.
- Additions go in at the end of each year. Sales loads, trading costs and taxes are not included.
- This is an estimate for planning, not investment advice.

## Worked examples

1. amount = $100,000.00, rate = 4%, er = 1%, years = 20 gives balance = $179,213.48, noFee = $219,112.31, fees = $27,831.76. Source: U.S. Securities and Exchange Commission, Investor.gov, How Fees and Expenses Affect Your Investment Portfolio (a $100,000 investment growing 4% a year for 20 years is worth about $208,000 with a 0.25% fee, $198,000 with 0.50% and $179,000 with 1.00%), https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated (retrieved 2026-10-03); year by year checked in Python (about $179,000 on the SEC page).
2. amount = $100,000.00, rate = 4%, er = 0.25%, years = 20, er2 = 0.5% gives balance = $208,413.03, otherBalance = $198,211.30, saved = -$10,201.74. Source: U.S. Securities and Exchange Commission, Investor.gov, How Fees and Expenses Affect Your Investment Portfolio (a $100,000 investment growing 4% a year for 20 years is worth about $208,000 with a 0.25% fee, $198,000 with 0.50% and $179,000 with 1.00%), https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated (retrieved 2026-10-03).
3. amount = $10,000.00, rate = 7%, er = 0.5%, years = 20, er2 = 0.05% gives cost = $3,691.27, fees = $2,069.29, otherBalance = $38,311.71.
4. amount = $5,000.00, rate = 0%, er = 2%, years = 1 gives balance = $4,900.00, fees = $100.00, cost = $100.00, lostGrowth = $0.00, firstFee = $100.00.
5. amount = $10,000.00, add = $1,200.00, rate = 6%, er = 1%, years = 10, er2 = 0.1% gives balance = $31,247.37, noFee = $33,725.43, otherBalance = $33,468.63.

## FAQ

### What is an expense ratio?

It is a fund’s yearly operating expenses (management fees, 12b-1 fees and other costs) as a percent of its assets. The SEC notes these fees come out of the fund’s assets, so they lower your return without a bill.

### How much does a 1% expense ratio cost?

In the SEC’s example, $100,000 growing 4% a year for 20 years ends at about $179,000 with a 1% fee, against about $208,000 with a 0.25% fee. With no fee it would be $219,112, so the 1% costs about $39,900: $27,832 of fees plus the growth they would have earned.

### How does the calculator apply the fee?

Each year the balance grows by the return, then the expense ratio is taken from that grown value, then any yearly addition goes in. This rule gives the SEC’s published figures to the nearest $1,000.

### Why is the cost more than the fees?

Money taken as a fee no longer earns a return. The cost on the page is the balance with no fee minus your balance: the fees plus the growth they would have made.

### Where do I find a fund’s expense ratio?

In the fee table of the fund’s prospectus, under annual fund operating expenses, and in its shareholder reports. Sales loads and trading costs are separate and not included here.

### Is a small difference in expense ratio worth it?

It grows with time and money. $10,000 at 7% for 20 years ends $3,691 short of no fee at a 0.5% ratio, and a 0.05% fund keeps $3,306 of that.

## Sources

- U.S. Securities and Exchange Commission, Investor.gov, How Fees and Expenses Affect Your Investment Portfolio (Investor Bulletin, July 23, 2025): $100,000 at 4% for 20 years with 0.25%, 0.50% and 1.00% fees. https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated (retrieved 2026-10-03)
- U.S. Securities and Exchange Commission, Investor.gov, How to Read a Mutual Fund Prospectus (Part 2 of 3: Fee Table and Performance). https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/how-read-0 (retrieved 2026-10-03)