Question

An investor purchases a mutual fund share for $100. The fund pays dividends of $6, distributes a capital gain of $7, and charges a fee of $5 when the fund is sold one year later for $105. What is the net rate of return from this investment? (Round your answer to the nearest whole number.)
An investor purchases a mutual fund share for $100. The fund pays dividends of $6, distributes a capital gain of $7, and charges a fee of $5 when the fund is sold one year later for $105. What is the net rate of return from this investment? (Round your answer to the nearest whole number.) Rate of return %

Answer 1

Rate of Return = (NAV at the end + Dividend & Capital Gain - Other Fees - NAV in the beginning) / NAV in the beginning

= (105 + 6 + 7 - 5 - 100) / 100 * 100

= 13 / 100 * 100

Rate of Return = 13%