10.
You buy 20 mutual fund shares at a price of $57.40 per share. You elect to reinvest distributions and, as a result, own 27.47 shares in 4 years. You sell the shares at a price of $66.30 per share, less brokerage fees of $30. Calculate your annual rate of return.
a. |
12.69% |
|
b. |
14.56% |
|
c. |
12.23% |
|
d. |
11.76% |
net selling price :[66.30*27.47]-30
= 1791.261
purchase price= 20*57.4 = 1148
Annual rate of return = {[Selling price - purchase price ]/purchaseprice } *1/n
={[1791.261-1148] /1148}*1/ 4
= {643.261/1148}*1/4
= .5603*1/4
= .1401 or 14.01%
correct option is " b" - 14.56% [approx to 14.01%]
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