Alyssa's Mutual Fund Fees Calculation

Calculation of Alyssa's Mutual Fund Fees

Alyssa had an average of $15,000 invested in her no-load mutual fund last year.

The mutual fund had a management fee of 1.5 percent and an additional 12b-1 fee of 1.25 percent.

To calculate how much the mutual fund fees cost Alyssa last year, we follow these steps:

1. Calculate the management fee:
Management fee = 1.5% of $15,000
Management fee = (1.5/100) * $15,000
Management fee = $225.00

2. Calculate the 12b-1 fee:
12b-1 fee = 1.25% of $15,000
12b-1 fee = (1.25/100) * $15,000
12b-1 fee = $187.50

3. Total mutual fund fees:
Total mutual fund fees = Management fee + 12b-1 fee
Total mutual fund fees = $225.00 + $187.50
Total mutual fund fees = $412.50

Therefore, the mutual fund fees cost Alyssa $412.50 last year (option b).