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11.1 The average equity mutual fund charges about 1.5 percent annually as an operating expense ratio. Assuming that the avera

please do in excel with explanation if possible
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Answer #1

principal amount = $ 10000

Gross average return over 20 year = 11%

Operating expense ratio over 20 year annually = 1.5%

Net Average Return on fund over 20 year = Gross rerurn percentage - operating expense percentage

Net Average Return on fund over 20 year = 11% - 1.5%

= 9.5 %

Amount of fund after 20 years = $10000 + {10000*9.5%*20}

= $ 29000

you may put this formula in excel cell, then you will find that =Gross rerurn percentage - operating expense percentage

and apply this rate on fund

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