You have $10,000 to invest and are considering two mutual funds: No-load Fund and Economy Fund. The No-load Fund charges a 12b-1 fee of 1% and maintains an expense ratio of 0.50%. The Economy Fund charges a front-end load of 4%, but has no 12b-1 fee and an expense ratio of 0.50%. Assume that the rate of return on both funds portfolios (before any fees) is 8% per year.

1. If you plan to buy and hold for three years, which one should you invest? Please explain.

2. If you plan to buy and hold for ten years, which one should you invest? Please explain.