Ledger for calculating reduction from fees and inflation
How much an annual percentage fee and an annual percentage inflation will reduce one's savings over a number of years.
When to use When you see the fee rate on a statement. When you want to apply news about the inflation rate to your own savings.
Cumulative fees
Fees are deducted from the balance each year. If the annual fee is one percent, you multiply the balance by zero point nine nine for the number of years. In an example from the U.S. Securities and Exchange Commission, an investment of one hundred thousand dollars earning four percent annually for twenty years would be worth approximately two hundred and eight thousand dollars with a zero point two five percent annual fee, and approximately one hundred and seventy-nine thousand dollars with a one point zero zero percent annual fee.
Reduction due to inflation
Dividing the nominal amount by one plus the inflation rate raised to the power of the number of years gives the real value. The average consumer price index for 2025 showed an overall increase of three point two percent from the previous year. In the U.S., it was three point four percent for the twelve months ending July 2026.
The two have separate effects
Fees reduce the balance, and inflation reduces purchasing power. Viewing both on the same table reveals the forces acting on your savings. This ledger does not include investment returns. Potential returns are not covered in this subject.
Try with your own numbers
Change the values to recalculate instantly. The formula is provided below. For the source of the values, see the reference page.
Input value
Output value
Formula Cumulative amount reduced by fees = Principal × (1 - (1 - Fee ÷ 100) ^ Number of years). Real value = Principal ÷ (1 + Inflation Rate ÷ 100) ^ Number of years
In other countries
The U.S. Securities and Exchange Commission advises that even with deposits, there is a risk that interest rates will not keep up with inflation. The consumer price index is published monthly by the Statistics Bureau of Japan and by the Bureau of Labor Statistics in the U.S. The formula is the same; the rates used differ by country and time.
Source (Archive)
- Understanding FeesU.S. Securities and Exchange Commission, Investor.gov
- 2020-Base Consumer Price Index, Japan, 2025 (Reiwa 7) Average.Statistics Bureau, Ministry of Internal Affairs and Communications
- Consumer Price Index Summary — July 2026 (news release)U.S. Bureau of Labor Statistics
- Risk and return (Teachers, Classroom Resources)U.S. Securities and Exchange Commission, Investor.gov