Question

Calculate the​ after-withdrawal future value of ​$10,000 invested for five years in each share class in the table below. In terms of​ costs, which would be the best investment for someone who knows the fund will be sold at the end of the​ five-year period? Assume that each​ fund's gross​ (before fees) total return is 12.00 percent per year.

Cost	Class​ "A"	Class​ "B"	Class​ "C"
​Front-end load	5.755.75	0.00	0.00
​Back-end load	0.00	5.005.00	1.001.00
		Declining​ 1% per year	First year only
Management fee	0.550.55	0.900.90	1.001.00
​12b-1 fee	0.250.25	0.500.50	1.00

Answer 1

Cost	class A	class B	class B
Investment amount	$10000	$10000	$10000
Fromt end load (%)	5.75%	0.00%	0.00%
Fromt end load (amount)	$575	$0	$0
Net investment amount	$9425	$10000	$10000
Investment period ( years)	5	5	5
Back end load	0.00%	5.00%	1.00%
		Declining 1% per year	first year only
Back end load (invested for 5 years)	0	0	0
Management fees (%)	0.55	0.90	1.00
12-b 1 fees (%)	0.25	0.50	1.00
Total fees	0.8	1.4	2.00
Gross return (%)	12	12	12
Net return (%)	11.2	10.6	10
Gross value of investment	$16610.07 (9425 × (1+0.12)5	$17623.42	$17623.42
Net value of investment	$16025.27 (9425 × (1+0.112)5	$16549.15	$16105.10
		Best option

Answer = 16549.15