Question
Invested in two mutual funds: Fund A 4 years ago- $500 , and $600 in Fund B 3 years ago. Today, these two investments are
Invested in two mutual funds: Fund A 4 years ago- $500 , and $600 in Fund B 3 years ago. Today, these two investments are both worth $800 (assuming no dividends or other distributions). Assume each fund continues to earn its respective rate of return, which is constant every year. which statements is correct about these funds? (assuming annual compounding of interest rate).
A) Your investment in Fund B will be worth more than your investment in Fund A in three years.
B) Fund B earns a higher annual rate of return than Fund A.
c) Fund B has earned an average annual return of 11.11%.
D) One year ago, you have less money in Fund A than in Fund B
E) Fund A has earned an average annual return of 15%.
Please show work.
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