Your friend never took a personal finance class, but found out you did. So he comes to you for advice. He has two funds offeredthrough his employer. One is a high growth mutual fund with 10% growth. The other is a moderate growth index fund offering 7%growth. At first glance it seems like an obvious choice, but the mutual fund is taking a 2.7 % fee of your friends $500 deposit, whilethe index fund is taking only a 0.7% fee. Over his 40 year career, what is the future value of the high growth fund after accountingfor the fee?IA) $142,832.61B $1,514,331,61C) $1,028,330.61D $1,428,328.61E $428,332.61

Choosing the high growth fund with a fee may not necessarily be the best choice compared to the…

Answered: Your friend never took a personal…

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter13: Investing In Mutual Funds, Etfs, And Real Estate

Section: Chapter Questions

Problem 2FPE

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