Question

Francesca withdrew $7,000 from B shares that she owned in the Already Been Counted mutual fund within one year of her purchase. If she must pay a 5% contingent deferred sales fee, what amount will she actually receive

Answer 1

After considering a 5% contingent deferred sales fee, Francesca will receive $6650 from her withdrawal of $7000 from the mutual fund.

Step-by-step explanation:

Francesca would be subject to a 5% contingent deferred sales fee upon withdrawing her investment of $7000 from the mutual fund. To calculate the actual amount she will receive, we take the original withdrawal amount and subtract the sales fee, calculated as 5% of $7000.

• Calculate the contingent deferred sales fee: $7000 × 5% = $7000 × 0.05 = $350.
• Subtract the fee from the withdrawal amount: $7000 - $350 = $6650.

Amount received = $7,000 - ($7,000 times 0.05)

Amount received = $7,000 - $350

Amount received = $6,650

Therefore, Francesca will receive $6650 after the sales fee is deducted from her withdrawn amount.

Answer 2

$6,650

Step-by-step explanation:

Francesca must subtract the contingent deferred sales fee from the total amount that she will withdraw, so we first calculate the contingent deferred sales fee:

contingent deferred sales fee = $7,000 x 5% = $350

Actual cash received = total amount withdrawn - contingent deferred sales fee = $7,000 - $350 = $6,650