The S&P 500, a benchmark index, tracking the performance of large U.S. equities has historically returned 8.5% per annum. The average active fund manager typically earns approximately 75% of the S&P 500 and charges higher annual fees. For reference, +90% of individual, non-professional investors lose money. Calculate the accumulated account balance in 20 years based on the following assumptions.
Rate =
Nper =
Pmt =
[pv] =
[fv] =
[type] =
Accumulated Asset Value _________________
a)expected return on S&P50==8.5%+0.25%=8.75%
actively managed fund=(75%*8.5%)+1.25%=7.625%
b)accumulated asset value for S&P:
=fv(rate,nper,pmt,pv,type)
=fv(8.75%,20,0,-25000,0)
=133821.32
for actively managed fund:
=fv(7.625%,20,0,-25000,0)
=108693.43
c)difference is 133821.32-108693.43=25127.89
The S&P 500, a benchmark index, tracking the performance of large U.S. equities has historically returned...
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