>The answer can be found in relatively simple math. As a simple example, consider an investment of $1 million in a fund that generates a 10 percent return in ye

>The answer can be found in relatively simple math. As a simple example, consider an investment of $1 million in a fund that generates a 10 percent return in years one and two and then loses 5 percent in years three and four. The investor would end up with about $1.09 million, a total gain of $90,000, or 9 percent, over the four years before fees. 1,000,000x(1.1x1.1x0.95x0.95-1) = 92,025 Why do you bother rounding down the figure and using a different unit (m$) if you are going to use the same unit eventually. ($92,025 = $0.09 million = $90,000). >the fund manager earns $20,000 and $20,400 for a total of $40,400 And then they proceed to take $400 into account. Vexing.