Suppose an individual invests $24,000 in a load mutual fund for two years. The load fee entails an up-front commission charge of 2.8 percent of the amount invested and is deducted from the original funds invested. In addition, annual fund operating expenses (or 12b-1 fees) are 0.59 percent. The annual fees are charged on the average net asset value invested in the fund and are recorded at the end of each year. Investments in the fund return 7 percent each year paid on the last day of the year. If the investor reinvests the annual returns paid on the investment, calculate the annual return on the mutual funds over the two-year investment period. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Annual return %
Suppose an individual invests $24,000 in a load mutual fund for two years. The load fee entails an up-front commission charge of 2.8 percent of the amount invested and is deducted from the original funds invested. In addition, annual fund operating expenses (or 12b-1 fees) are 0.59 percent. The annual fees are charged on the average net asset value invested in the fund and are recorded at the end of each year. Investments in the fund return 7 percent each year paid on the last day of the year. If the investor reinvests the annual returns paid on the investment, calculate the annual return on the mutual funds over the two-year investment period. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Annual return %
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Suppose an individual invests $24,000 in a load mutual fund for two years. The load fee entails an up-front commission charge of 2.8
percent of the amount invested and is deducted from the original funds invested. In addition, annual fund operating expenses (or 12b-1
fees) are 0.59 percent. The annual fees are charged on the average net asset value invested in the fund and are recorded at the end
of each year. Investments in the fund return 7 percent each year paid on the last day of the year. If the investor reinvests the annual
returns paid on the investment, calculate the annual return on the mutual funds over the two-year investment period. (Do not round
intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))
Annual return
%
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