I'm trying to find a tool that will allow me to calculate the true cost of fund expenses. Not only how much I will be charged in expenses but also how much money those lost expenses could have made if they were reinvested. Does anyone know of a good tool?
Alternatively, is this a correct approach:
I'm going to assume 7% rate of return.
Fund one has an expense ratio of .5%
Fund two has an expense ration of .08%
Can I just use one of the many compounding interest calculators on the web and plug in a 6.5% rate of return for fund one (7-.5) and a 6.92% (7-.08) rate of return for fund two and then compare the difference? Math is not my forte so I'm not sure this is mathematically correct.
I was going to use this calculator:
http://www.moneychimp.com/calculator/compound_interest_calculator.htm
