You invest $10,000 in a mutual fund with a 3% back end load which decreases by 1% at the end of each year. The fund charges an annual expense ratio of 1.4%. Suppose the fund’s assets return 4% in the first year of your investment and return 15% in the second year. You decide to close your account after two years.
a. How many dollars will you have when you close out the account?
b. What is your annual rate of return over those two years?
