Answer:
7.9%
Explanation:
Calculation to determine your rate of return on the fund if you sell your shares at the end of the year
First step is to determine the Cost of shares
Cost of shares =1700 x $25
Cost of shares= $42,500
Second step is to calculate the Total amount invested
Total amount invested=$42,500/(1-.02)
Total amount invested= $43,367
Third step is to calculate the Shares increase from $42,500 to...
Shares increase =$42,500(1.12-.019)
Shares increase=$42,500(1.101)
Shares increase= 46,793
Now let determine the Rate of Return
Rate of Return= (46,793 -$43,367)/$43,367
Rate of Return= $3,426/$43,367
Rate of Return= 0.079*100
Rate of Return=7.9%
Therefore your rate of return on the fund if you sell your shares at the end of the year is 7.9%
