For a recent 10-year period, a mutual fund company reported performance (average annual return) for two of its funds as follows:

Fund Average Return

Equity-Income Fund 10.50 percent

Personal Strategy Growth Fund 9.50 percent

Assume you invested $10,000 in each fund at the beginning of this 10-year period.

(a) How much difference would there be in the ending wealth (after 10 years) between the two funds? [10 marks]

(b) For the same two funds, the ending wealth after five years was $1.45 per dollar invested for the Equity-Income Fund and $1.25 per dollar invested for the Personal Strategy Growth Fund. What were that annual average returns for each fund for this five-year period? [10 marks]