How This Calculator Works & Financial Methodology
When dividends are automatically reinvested (DRIP), each payout buys additional shares, which in turn generate their own dividends while companies simultaneously raise their annual dividend per share. Over 10 to 25 years, this dual compounding engine creates a steep passive income curve and a high Yield on Cost.
Compounding DRIP & Yield-on-Cost Model
Portfolio(t) = [Portfolio(t−1) + Annual Contribution] × (1 + Price Appreciation) + Net Reinvested Dividends