In: Finance
The performance and fees of 4 share classes of the same fund are in following table:
Class Inst Class Inv Class A Class B
Expense ratio 1% 1% 1% 1%
12b-1 fee 0.3% 0.1%
Front-end load 4%
Back-end load start at 6%
and ↓ 1%/year
All share classes have the same annual rate of return of 10.0%. If you have $10,000 to invest
in each of these share classes, how much will you get if you plan to sell them after 2 and 8
years?
Class Inst | Class Inv | Class A | Class B | |
Expense ratio | 1% | 1% | 1% | 1% |
12b-1 fee | 0.30% | 0.10% | ||
Rate of return | 10% | 10% | 10% | 10% |
Rate of return net of expense | 9.00% | 8.70% | 8.90% | 9.00% |
Front end load | 0% | 0% | 4% | 0% |
Amount invested | $ 10,000.00 | $ 10,000.00 | $ 10,000.00 | $ 10,000.00 |
Actual amount invested | =10000*(1-0%) | =10000*(1-0%) | =10000*(1-4%) | =10000*(1-0%) |
Actual amount invested | $ 10,000.00 | $ 10,000.00 | $ 9,600.00 | $ 10,000.00 |
Amount after 2 year on invested amount | =10000*(1+9%)^2 | =10000*(1+8.7%)^2 | =9600*(1+8.9%)^2 | =10000*(1+9%)^2 |
Amount after 2 year on invested amount | $ 11,881.00 | $ 11,815.69 | $ 11,384.84 | $ 11,881.00 |
Back end charge | 0% | 0% | 0% | 5% |
Amount net of back end charge | =11881*(1-0%) | =11815.69*(1-0%) | =11384.84*(1-0%) | =11881*(1-5%) |
Amount net of back end charge | $ 11,881.00 | $ 11,815.69 | $ 11,384.84 | $ 11,286.95 |
Amount after 8 year on invested amount | =10000*(1+9%)^8 | =10000*(1+8.7%)^8 | =9600*(1+8.9%)^8 | =10000*(1+9%)^8 |
Amount after 8 year on invested amount | $ 19,925.63 | $ 19,491.10 | $ 18,988.66 | $ 19,925.63 |
Back end charge | 0% | 0% | 0% | 0% |
Amount net of back end charge | =19925.63*(1-0%) | =19491.1*(1-0%) | =18988.66*(1-0%) | =19925.63*(1-0%) |
Amount net of back end charge | $ 19,925.63 | $ 19,491.10 | $ 18,988.66 | $ 19,925.63 |