Calculate mutual fund fees

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Reference no: EM132020137

1. Compare the expenses on two mutual funds that follow the same index: S&P 500. The first fund is PEOPX (Dreyfus S&P 500 Index) and it's expense ratio is 0.5% per year. The second fund is VFIAX (Vanguard S&P 500 Index) with an expense ratio of 0.05% per year.

2. Assume that both funds will return 10% per year until YOUR retirement (you will have your own number of years here) and that you will invest $5,500 per year starting today all the way until you retire.

please calculate mutual fund fees and compare which mutual fund is better to invest.

3. Calculate the difference in future values for PEOPX and VFIAX at your retirement age (Hint: subtract the annual expense ratio from the annual return and use the difference to compute future value of your contributions).

4. Find a comparable item (an iPhone, a TV set, a car (which model?) etc.) that most closely represents this difference.

Reference no: EM132020137

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