Financial education tool
Expense ratio calculator
Compare how two hypothetical annual fund expense ratios may affect a long-term balance. The calculator keeps the return and contribution assumptions identical so the modeled fee difference is easier to isolate.
Inputs
Compare two fee scenarios
Change any assumption below. Results update automatically and are educational estimates, not forecasts.
Modeled as a contribution at the end of each year.
Use the same assumed gross return for both fee scenarios.
Estimated outcome
Long-term fee comparison
Scenario A ending balance
$551,902
Expense ratio: 0.75%
Scenario B ending balance
$636,327
Expense ratio: 0.05%
- No-fee hypothetical ending balance
- $642,887
- Estimated fee drag — Scenario A
- $90,986
- Estimated fee drag — Scenario B
- $6,560
- Difference between the two ending balances
- $84,426
- Total amount contributed
- $190,000
Under these assumptions, Scenario B produces the higher modeled ending balance. This does not mean one real fund will outperform another: actual investments can have different returns, risks, tracking, taxes, trading costs and other characteristics.
Reference scenarios
How the same $10,000 scenario changes as the fee assumption changes
This reference table starts with $10,000, assumes no additional contributions and uses a constant hypothetical gross annual return of 7%. The fee rates are illustrative examples only; they are not industry averages, forecasts or recommended fee levels.
| Expense ratio | 10-year balance | 20-year balance | 30-year balance | 30-year drag vs. 0% |
|---|---|---|---|---|
| 0% | $19,672 | $38,697 | $76,123 | $0 |
| 0.05% | $19,573 | $38,312 | $74,989 | $1,134 |
| 0.25% | $19,185 | $36,807 | $70,616 | $5,507 |
| 0.5% | $18,710 | $35,006 | $65,495 | $10,628 |
| 1% | $17,791 | $31,650 | $56,308 | $19,815 |
The 0% row is a mathematical reference, not a claim that a real investment has no costs. Expense ratios also do not capture every cost an investor may face.
Methodology
How the calculator models expense-ratio drag
An expense ratio is an annual fund operating-cost percentage. The calculator treats the expense ratio as a recurring reduction to the modeled invested balance, so a higher fee can affect both the current balance and the amount left to compound in later years.
The interactive comparison keeps the starting balance, annual contribution, assumed gross return and time horizon identical across both scenarios. It then changes only the annual expense ratio. A third zero-fee path is shown as a mathematical reference point, not as a realistic claim that an investment has no other costs.
For each modeled year, the existing balance receives the hypothetical gross return, the selected expense ratio reduces that balance, and the annual contribution is added at year-end. The model uses annual steps for clarity rather than attempting to reproduce the daily accounting of a specific fund.
Why compare the same return assumption?
Holding the gross-return assumption constant isolates the mathematical effect of the fee. Real funds can perform differently for many reasons, so this tool should not be used to predict which fund will produce the higher actual return.
What an expense ratio does not include
A fund expense ratio does not necessarily capture every cost associated with owning or trading an investment. Transaction costs, sales loads, brokerage charges, advisory fees, taxes and other costs can exist outside the expense ratio, depending on the product and account.
Sources & definitions
Official references for fund fees and expense ratios
The calculator math is Vault of Money's transparent educational model. The definitions and fee context below are grounded in official investor-education resources.
- Investor.gov — Expense Ratio
Definition of an expense ratio and where the figure appears in a fund's prospectus fee table.
- Investor.gov — Mutual Fund and ETF Fees and Expenses
SEC investor bulletin explaining annual fund operating expenses, shareholder fees and the prospectus fee table.
- Investor.gov — How Fees and Expenses Affect Your Investment Portfolio
SEC investor bulletin illustrating why recurring fees can matter over long holding periods.
- FINRA — Mutual Funds and Fund Costs
FINRA guidance on mutual fund fees, expense ratios and other costs that may sit outside the expense ratio.
Cite this calculator
Stable reference details
Vault of Money Editorial Team. “Expense Ratio Calculator: Compare Long-Term Fund Fees.” Vault of Money. Updated October 3, 2026.
https://vaultofmoney.com/tools/expense-ratio-calculator
If you cite a modeled result, include the inputs or reference-table assumptions because changing the return, fee, contribution or time horizon changes the output.
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