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Dividend Reinvestment (DRIP)

Quick answer

Reinvested dividends compound: 8,000 earning 4% yield plus 3% price growth becomes ≈15,740 in 10 years at a 7% total return.

Figures are estimates from this calculator’s standard formula — adjust the inputs in the tool below for your exact number.

How the Dividend Reinvestment Calculator Calculates Results

FV = investment × (1 + dividend yield + growth)^years

A DRIP automatically buys more shares with every dividend. The calculator projects how reinvested payouts compound total return instead of arriving as spendable cash. Mathematically, the engine applies FV = investment × (1 + dividend yield + growth)^years. An 8,000 position with a 4% yield and 3% price growth compounds at ≈7% total when dividends are reinvested: 8,000 × 1.07^10 ≈ 15,740 — taking dividends as cash would leave the balance at just 8,000 × 1.03^10 ≈ 10,751. Everything you enter stays in your browser, and the answer appears in the same units as your inputs the moment the figures are complete.

  1. 1

    Step 1

    Fill in each input field with your own data.

  2. 2

    Step 2

    The tool runs the formula FV = investment × (1 + dividend yield + growth)^years on your figures.

  3. 3

    Step 3

    Review the result displayed on screen.

  4. 4

    Step 4

    Refine the inputs until the numbers fit your case.

Use Cases

Retirement compounding

Switching payouts to accumulation mode

Yield-portfolio growth

Projecting income positions decades out

Fee-free accumulation

Using company DRIPs to dodge commissions

Young-investor setup

Automating the first portfolio's growth

Common Mistakes

  • Counting yield as spendable

  • Ignoring taxes on reinvestment

  • Assuming constant yield

FAQs

How much does reinvesting add?

The compounding gap: this example ends ≈15,740 versus ≈10,751 — reinvestment contributes ≈4,990 over the decade (minus the cash you gave up).

Are reinvested dividends taxed?

Usually yes, as if received in cash — DRIPs defer nothing; check your jurisdiction's sheltered-account rules.

What is the math behind the Dividend Reinvestment Calculator?

The Dividend Reinvestment Calculator applies FV = investment × (1 + dividend yield + growth)^years, where yield plus growth approximates total return when payouts are reinvested.

How do I know the result is right?

The Dividend Reinvestment Calculator uses the standard closed-form formula shown above; the accuracy depends only on the figures you supply.

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