I'm currently in the middle of comparing brokerage firms cost-wise. One brokerage firm charges its service fee based on an annual rate that is charged monthly. Since I want to employ dollar cost averaging, the service fees rise every month. How do I calculate the total amount of service cost paid after a 25 year period?
I believe this is an arithmetic sequence since the structure would look like this:
MP = Monthly service fee percentage AP = Anual service fee percentage I = Initial investment M = Monthly investment N = Period (1-300) SF_N = Service fee in period N MP = AP / 12 SF_1 = I*MP SF_2 = I*MP + M*MP SF_3 = I*MP + 2M*MP SF_N = I*MP + (N-1)M*MP
Is this correct? Would the total sum after 25 years then be:
S = (25*12*(I*MP + (I*MP + (300-1)M*MP)))/2