On January 2, 2017, you invest $100,000 in Righteous, a load fund that charges a fee of 7 percent. The fund's returns were 12.8 percent in 2017, 13.9 percent in 2018, and 7.9 percent in 2019. On December 31, 2019, you redeem all your Righteous shares. The dollar value is

Question

Quizplus · Accepted Answer

First, we need to calculate the fees charged by the load fund for each year:
- 2017: 7% x $100,000 = $7,000
- 2018: 7% x ($100,000 - $7,000 + $12,800) = $6,836
- 2019: 7% x ($100,000 - $7,000 + $12,800 + $12,892.50) = $7,385.42

Then, we can calculate the dollar value of the investment at the end of 2019:
- 2017 return: $100,000 - $7,000 = $93,000
- 2018 return: $93,000 x 13.9% = $12,897
- 2019 return: ($93,000 + $12,897) x 7.9% = $8,220.77
- Dollar value at the end of 2019: $93,000 + $12,897 + $8,220.77 - $7,385.42 = $107,732.35

Therefore, the redemption value is $107,732.35.

On January 2, 2017, You Invest $100,000 in Righteous, a Load