$10,000 is invested at a 5% annual return before expenses. After 20 years, what do annual expenses of 1.5% and of 0.5% leave?

1. Expenses are deducted every year, so the gap between two funds compounds rather than staying flat. 2. With annual operating expenses of 1.5%, the $10,000 grows to roughly $19,612 after 20 years. 3. With annual operating expenses of only 0.5%, the same $10,000 ends at $24,002. 4. The stem lists 1.5% first, so the higher-cost figure must come first in the answer. 5. The gap between the two outcomes is 23%, from a difference of one percentage point a year. 6. Option B reverses the pairing and is the trap for a reader who matches numbers without matching order. 7. This is why even small differences in fees are worth comparing before investing. _Source: US SEC Office of Investor Education and Advocacy, "Mutual Funds and ETFs: A Guide for Investors", section Fee Table: Annual Fund Operating Expenses_