An individual has started investments of $100/month into a spread-load ...

By Investopedia Staff AAA
Q:
An individual has started investments of $100/month into a spread-load, periodic payment plan. What is the maximum sales charge that may be taken by the company over the first 48 months?
a) $432
b) $768
c) $960
d) $2,400
A:
The correct answer is b.
When a periodic payment (or contractural) plan company is organized as a spread-load company, it may take sales charges of 20% on any deposit, but may not exceed an average of 16% over the first 4 years. 48 deposits × $100 = $4,800 × 16% = $768.

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