Investing always involves paying fees to the intermediaries

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Investing always involves paying fees to the intermediaries. While the size of the fees can seem small (most are less than 1% per year), the compound effect might not be that small. In this exercise you will Compare the expenses on two mutual funds that invest in identical stocks: S&P 500. The first fund is PEOPX (Dreyfus S&P 500 Index) and it's expense ratio is 0.5% per year. The second fund is VFIAX (Vanguard S&P 500 Index) with an expense ratio of 0.05% per year. Assume that both funds will return 10% per year until YOUR retirement (you will have your own number of years here) and that you will invest $5,500 per year starting today all the way until you retire.

Reference no: EM132021387

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