ETF & Index Fund Investing Math

What you'll build

What you will be able to do

Each lab ends with a concrete result that you build yourself and the checker confirms, cell by cell.

• Grow a starting amount plus a monthly plan for 30 years in a 0.07 % index fund and a 1.20 % active fund with FV, and measure what the fee gap costs.
• Compare 12 months of Fund A with its index, measure how far it fell behind (tracking difference) and how evenly it followed (tracking error).
• Build a six-stock market-cap index: market caps, weights, the index return with SUMPRODUCT and the new index level.
• Turn a ten-year price index into a total return index with dividends reinvested, annualise both and chart the widening gap.
• Invest $12,000 in Fund A either all in January or as $1,000 a month, count the units, the average cost and which way ends up ahead.
• After a strong stock year you measure how far a 60/40 portfolio has drifted, apply a ±5-point band rule and work out the trades back to target.
• Compute return and volatility for eleven stock/bond mixes, find the lowest-risk mix and chart risk against the weight.
• Compare two funds on the same index: the cheaper TER against the bigger dividend tax leak, and find which one really costs less per year.