Many retirement funds charge an administrative fee equal to 0.25% on managed assets. Suppose that Alexx and Spenser each invest $4,000 in the same stock this year. Alexx invests directly and earns 4% a year. Spenser uses a retirement fund and ears 3.75%. If Alexx and Spenser leave their investments in place for 30 years, with annual compounding of the interest, how much more will Alexx have than Spenser at the end of the 30-year period? Alexx will have more than Spenser after 30 years. (Enter your response rounded to two decimal places)
Many retirement funds charge an administrative fee equal to 0.25% on managed assets. Suppose that Alexx and Spenser each invest $4,000 in the same stock this year. Alexx invests directly and earns 4% a year. Spenser uses a retirement fund and ears 3.75%. If Alexx and Spenser leave their investments in place for 30 years, with annual compounding of the interest, how much more will Alexx have than Spenser at the end of the 30-year period? Alexx will have more than Spenser after 30 years. (Enter your response rounded to two decimal places)
Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter6: Saving And Investing
Section: Chapter Questions
Problem 15AA
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