A retirement investor places $1 in a low-cost index fund for…
A retirement investor places $1 in a low-cost index fund for 40 years. The fund earns a gross annual return of 8%,but annual expenses reduce the investor’s net return to 6.25%.a) What is the future value of $1 after 40 years at the gross return of 8%?b) What is the future value of $1 after 40 years at the net return of 6.25%?c) What percentage of the no-fee future value is lost because of fees?