Problem
A year ago, George Jetson, from Orbit City, Texas, invested $1,600 by buying 160 shares of the Can't Lose Mutual Fund, an aggressive growth no-load mutual fund. George reinvested his dividends, so he now has 173 shares. So far, the NAV for George's investment has risen from $10 per share to $15.25.
1) What is the percentage increase in the NAV of George's mutual fund?
2) If George redeemed the first 160 shares of his mutual fund investment for $15.25 per share, what would be his capital gain over the amount invested?
3) Assuming George pays income taxes at the 25 percent rate, how much income tax will he have to pay if he sells those first 160 shares? George has owned the shares for less than a year.