Pearson eText for Engineering Economy -- Instant Access (Pearson+)
17th Edition
ISBN: 9780137533138
Author: William Sullivan, Elin Wicks
Publisher: PEARSON+
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Chapter 1, Problem 8P
To determine
The expected value of earning a college degree.
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Many retirement funds charge an administrative fee equal to 0.25% on managed assets. Suppose that Alex and Spenser each invest $50,000 in the same year. Alex invests in a no-load fund (that doesn’t charge the 0.25% fee) and earns 5% a year. Spenser uses another retirement fund that charges the 0.25% fee and so only earns 4.75%. After 30 years, how much more will Alex have than Spenser?
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Multiple Choice
4.8 percent
9.8 percent
20 percent
39.2 percent
Chapter 1 Solutions
Pearson eText for Engineering Economy -- Instant Access (Pearson+)
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