Question

As part of his 401(k) retirement plan at work, Ken Lowery invests 6.0 percent of his salary each month in the Capital Investments Lifecycle Fund. At the end of this year, Ken’s 401(k) account has a dollar value of $211,200. If the fund charges a 12b-1 fee of 0.8 percent, what is the amount of the fee

Answer 1

Answer:

The amount of the fee is $1689.60

Explanation:

The computation of the amount of the fee is shown below:

= Dollar value × fund charges a 12b-1 fee

= $211,200 × 0.8%

= $211,200 × 0.008

= $1689.60

Since the question has asked the fee amount so we consider the fee charges percentage, not the capital investment Lifecycle fund. Thus, we ignore the Capital Investments Lifecycle Fund as it is not relevant.

Hence, the amount of the fee is $1689.60