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You invest in a mutual fund that charges a 3% front-end load, 1% total annual fees,...

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Finance

You invest in a mutual fund that charges a 3% front-end load, 1%total annual fees, and a 0% back-end load on Class A shares. Thesame fund charges a 0% front-end load, 2% total annual fees, and a2% back-end load on Class B shares. If you plan to sell the fundafter 4 years, which is a better choice, Class A shares or Class Bshares?  Assume $100 is invested, and assume a 10% annualreturn before expenses.

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Class A Shares Class B Shares Investment 10000 10000 Frontend Load a 300 0 Return 10 Year 1 end return 11000 11000 Annual Fees at year 1 b 110 220 Year 2 end return 12100 12100 Annual Fees at year 2 c    See Answer
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You invest in a mutual fund that charges a 3% front-end load, 1%total annual fees, and a 0% back-end load on Class A shares. Thesame fund charges a 0% front-end load, 2% total annual fees, and a2% back-end load on Class B shares. If you plan to sell the fundafter 4 years, which is a better choice, Class A shares or Class Bshares?  Assume $100 is invested, and assume a 10% annualreturn before expenses.

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