In: Finance
ABC Domestic Equity Fund sells two types of share, A+ and B+. A+ shares are sold with front-end load fee of 5% whilst Type B+ shares are not subject front-end load fee but are charged to investment management fee of 1% per annum as well as exit (back-end load) fee that start at 12% and reduce by 2% for each full year the investor holds the portfolio (until the 6th year). The annual rate of return for both types of share is 15%.
(a) Calculate the value of a Rs 25,000 investment made by investor
Mr Paul Halp in Type A+ shares if the shares are disposed after (i)
one year and (ii) 5 years.
The value of Investment if shares are disposed off at one year.
Reusltant table:
Step 2:
The valuation of investment if it disposed at the end of 5th year.
Resultant tabel:
value of investment at 5th year is $45,228.60