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Suppose a mutual fund advertises a yearly return of 12%, for which it charges an upfront fee (a percentage of your investment). Another fund advertises
Suppose a mutual fund advertises a yearly return of 12%, for which it charges an upfront fee (a percentage of your investment). Another fund advertises the same return, but it charges a 3% fee each year. Assuming both funds can achieve the 12% advertised return, which one would you choose if you are 25 years old and starting to save for your retirement? Explain. Which option would you choose if you are 55 years old and starting to save for your retirement? Explain.
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