Dividend Growth Calculator

Formula

The formula to calculate the future dividend income is:

\[ D = \text{CDI} \times (1 + r)^n \]

Where:

\(D\) is the future dividend income
\(\text{CDI}\) is the current dividend income
\(r\) is the growth rate
\(n\) is the number of years

What is Dividend Growth?

Dividend growth is the total growth of a dividend over a time period. It is calculated by multiplying the current dividend income by 1 plus the growth rate raised to the power of the time in years. This calculation helps investors understand how their dividend income will increase over time based on the expected growth rate.

Example Calculation 1

Let's assume the following values:

Current Dividend Income (CDI) = 1000
Growth Rate (r) = 5%
Number of Years (n) = 10

Using the formula:

\[ D = 1000 \times (1 + 0.05)^{10} = 1000 \times 1.6289 = 1628.89 \]

The Future Dividend Income is 1628.89.

Example Calculation 2

Let's assume the following values:

Current Dividend Income (CDI) = 500
Growth Rate (r) = 3%
Number of Years (n) = 5

Using the formula:

\[ D = 500 \times (1 + 0.03)^{5} = 500 \times 1.1593 = 579.65 \]

The Future Dividend Income is 579.65.