How much is your effective annual return on the fund

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Reference no: EM132038802

Question: You plan to purchase shares in an open-ended mutual fund. You expect the assets owned by the fund to increase by 8% per year. When you purchase the fund, they charge a 3% front-end load. When you sell the fund, they charge a 2% back end load if you sell before 3 years - otherwise there is back end load is 0%. The annual management fee for the fund is 0.4% and the other expenses of the fund are 0.25% per year. You will invest 100,000 in the fund. How much do you expect to have if you sell the fund after 2 years? How much is your effective annual return on the fund?

Reference no: EM132038802

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