Question

When Jill Thompson received a large settlement from an automobile accident, she chose to invest $115,000 in the Vanguard 500 Index Fund. This fund has an expense ratio of 0.17 percent. What is the amount of the fees that Jill will pay this year? (Round your answer to 2 decimal places.) Annual fee

Answer 1

Jill will have to pay $195.5 in fees this year.

Explanation:

This question may be solved by a simple rule of three.

This fund has an expense ratio of 0.17 percent. This means that for each investment in this fund, there is a fee of 17% percent of the value.

$115,000 is 100%, that is, decimal 1. How much is 0.17%, that is, 0.0017 of this value. So

1 - $115,000

0.0017 - $x

`x = 115000*0.0017 = 195.5`

Jill will have to pay $195.5 in fees this year.

Answer 2

$195.50

Explanation:

0.17% × $115,000 = $195.50

Jill's account will be charged $195.50 in expense fees.