Scribd
Upload
31 views2 pages

Impact of Expense Ratio on Returns

The document outlines the impact of expense ratios on investment returns, comparing two scenarios: one with a 0.00% expense ratio yielding ₹16,36,654 and another with a 1.00% expense ratio yielding ₹13,74,349 over 20 years at a 15% return. It also provides market capitalization details for ABC Co. and XYZ Co., indicating their respective values based on shares and prices. The formula for compound interest is presented as FV = PV(1+r)^n.

Uploaded by

Tejas Kainkar
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
31 views2 pages

Impact of Expense Ratio on Returns

The document outlines the impact of expense ratios on investment returns, comparing two scenarios: one with a 0.00% expense ratio yielding ₹16,36,654 and another with a 1.00% expense ratio yielding ₹13,74,349 over 20 years at a 15% return. It also provides market capitalization details for ABC Co. and XYZ Co., indicating their respective values based on shares and prices. The formula for compound interest is presented as FV = PV(1+r)^n.

Uploaded by

Tejas Kainkar
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

Expense Ratio

Amount Invested ₹1,00,000


Expected Returns 15%
Period 20 Formula of Compoundi
FV= PV(1+r)

FV
Case 1 : PV
Expense Ratio 0.00% r
Calculation n
[ 1,00,000(1+0.15)^20] ₹16,36,654

Case 2 :
Expense Ratio 1.00%
Calculation
{ 1,00,000[1+(0.15-0.01)]^20} ₹13,74,349

Market Capitalization

ABC Co. 5,00,000 shares of ₹25 per share ₹1,25,00,000


XYZ Co. 1,00,000 shares of ₹60 per share ₹60,00,000
Formula of Compounding Interest
FV= PV(1+r)^n

Future value
Present Value
Interest rate
No. of years

You might also like