DRIP Returns Calculator

Calculate DRIP Returns







Formula

To calculate the DRIP Returns (DR):

\[ DR = P \cdot \left(1 + \frac{r}{n}\right)^{n \cdot t} \]

Where:

What are DRIP Returns?

DRIP returns, or Dividend Reinvestment Plan (DRIP) returns, refer to the returns generated from reinvesting dividends back into the stock or fund that paid them. Instead of receiving dividends as cash, investors use them to purchase additional shares, which can lead to compound growth over time. This strategy can significantly enhance the overall returns on an investment, especially in the long term, as the reinvested dividends themselves start earning dividends.

Example Calculation 1

Let's assume the following values:

Using the formula:

\[ DR = 1000 \cdot \left(1 + \frac{5}{4 \cdot 100}\right)^{4 \cdot 10} = 1647.01 \]

The DRIP returns are $1647.01.

Example Calculation 2

Let's assume the following values:

Using the formula:

\[ DR = 5000 \cdot \left(1 + \frac{3}{12 \cdot 100}\right)^{12 \cdot 5} = 5808.08 \]

The DRIP returns are $5808.08.