Monthly Dividend DRIP Calculator

Calculate Monthly Dividend DRIP





Formula

To calculate the monthly dividend drip:

\[ D = (N \times d) + (N \times d \times r) \]

Where:

What is a Monthly Dividend DRIP?

A monthly dividend drip (Dividend Reinvestment Plan) is a program that allows investors to reinvest their cash dividends into additional shares or fractional shares of the underlying stock on the dividend payment date. This process helps in compounding the investment over time as the dividends are used to purchase more shares, which in turn generate more dividends. This method is particularly beneficial for long-term investors looking to maximize their returns through the power of compounding.

Example Calculation 1

Let's assume the following values:

Using the formula:

\[ D = (100 \times 0.50) + (100 \times 0.50 \times 0.05) = 50 + 2.50 = 52.50 \]

The Monthly Dividend DRIP is $52.50.

Example Calculation 2

Let's assume the following values:

Using the formula:

\[ D = (200 \times 1.00) + (200 \times 1.00 \times 0.03) = 200 + 6 = 206 \]

The Monthly Dividend DRIP is $206.00.