Answer:
10.2 years
gain is $2,704.00
rate of return is 22%
Step-by-step explanation:
The it would take for mutual to double can be determined the future value formula as shown below:
=nper(rate,pmt,-pv,fv)
rate is the rate of return of 7% per year
pmt is the periodic amount placed in the mutual fund and it not applicable here
pv is the original amount invested which is $7,500
fv is the future worth of $15,000
=nper(7%,0,-7500,15000)=10.2 years
cost of shares=actual cost of purchase+broker's commission
=(800*$15.34)+$20=$12,292.00
gain on shares=sales proceeds-cost=(800*$18.77)-$20-$12,292.00=$2,704.00
rate of return=gain/original cost=$2,704.00/$12,292.00 =22%
