Four years ago you purchased 1200 units of a fund with a NAV of $16.75. The NAV is now $34.50 and the fund had a 6 percent redemption fee declining at 1 percent per year. What will be the proceeds if you sell it today?

Question

Quizplus · Accepted Answer

To find the sale proceeds, we first need to calculate the redemption fee:
Redemption fee = 1200 x $34.50 x 6% x (4 years - 1%) = $877.80

Next, we need to calculate the cost basis:
Cost basis = 1200 x $16.75 = $20,100

Finally, we can calculate the sale proceeds:
Sale proceeds = (1200 x $34.50) - redemption fee - cost basis
Sale proceeds = ($41,400) - ($877.80) - ($20,100)
Sale proceeds = $40,572.20

Therefore, the answer is C.

Four Years Ago You Purchased 1200 Units of a Fund