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Suppose you have 2 mutual funds whose annual returns are shown in the following table. Assume you invest $500 in each, and the proceeds from

Suppose you have 2 mutual funds whose annual returns are shown in the following table. Assume you invest $500 in each, and the proceeds from year 1 are reinvested in year 2 and so on.

  1. How much money do you accumulate in each fund after 5 years?
  2. For each fund, calculate the single annual rate which would yield the same return over the 5-year period.
Year

Fund X

Fund Y
1 .10 .28
2 .14 .17
3 .02 -.02
4 .04 .30
5 .16 -.10

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