The cost lens

The formula

End value = P x (1 + g - c)^n

P is the starting amount, 10,000. g is gross yearly growth, fixed at 5%. c is the yearly charge you set. n is the number of years. The no-charge column uses c = 0.

What the charge means here

The charge is subtracted from the growth rate once a year. It is a simplified model: growth is constant, there are no contributions or withdrawals, no tax, no variation in returns and no other costs. The result is arithmetic, not a forecast, and not the outcome of any product.

A different convention

A fee taken as a percentage of the balance each year after growth gives P x ((1 + g)(1 - c))^n. It removes slightly more, because the charge also applies to that year's growth. Both are shown below so the difference is visible. The cost lens uses the first.