Your inputs

Model a holding

Investment amount

Amount invested, from $1 through $1 billion.

Dividend yield

Starting annual yield, from 0% through 50%.

Annual dividend growth

How fast the yield grows yearly, from -50% through 50%.

Time horizon

Use a whole number from 1 through 100.

Advanced assumptions

Dividend handling

Reinvesting buys more shares each year; taking cash leaves the balance unchanged.

Your inputs are calculated locally and are not stored.

Total dividend income over 10 years$44,811.48

Dividends are reinvested each year, so income compounds on a growing balance.

First-year income: $3,000.00
Ending value: $144,811.48
Yield on cost: 7.0765%

Formula & methodology

How dividend income is calculated

Each year, income equals the current balance times the current yield. When dividends are reinvested, that income is added back to the balance so next year’s income is calculated on a larger amount. The yield itself grows every year by the annual dividend growth rate you enter.

Income_year = Balance_year × Yield_year
Yield_year+1 = Yield_year × (1 + g)

Balance: Invested amount, growing if reinvested
Yield: Dividend yield for that year
g: Annual dividend growth rate

Worked example

$100,000 at a 3% yield growing 5% a year for 10 years

Suppose you invest $100,000 in a holding with a 3% starting yield, the dividend grows 5% each year, and every dividend is reinvested. First-year income is $3,000. Over 10 years, total dividend income is $44,811.48, the ending value is $144,811.48, and the yield on cost has climbed to about 7.0765%.

This is a hypothetical, educational calculation based only on the values you enter. It does not look up live prices or dividends, and it is not investment advice.

Assumptions

What this calculator assumes

The yield grows at a constant annual rate for the full period.
Dividends are paid and, if reinvested, added once per year at the same yield.
Share price change is not modeled — ending value reflects only reinvested dividends on the starting amount.
No tax treatment of dividends is modeled.
Money values are rounded to the nearest cent for display.

Common questions

Dividend income FAQ

What is yield on cost?

Yield on cost is the current annual dividend divided by your original investment. As the dividend grows, yield on cost rises above the starting yield even though the amount you originally paid never changes.

What does “take as cash” change?

Taking dividends as cash leaves the invested balance the same each year, so income grows only from the rising yield. When you reinvest, income also compounds because it is calculated on a larger balance every year.

Primary sources

Sources and review notes

Methodology last checked Jul 14, 2026. Formula implementation is covered by deterministic unit tests. No financial professional review is claimed yet.