Why is the charge effectively 4.75% for the last monthly payment for this option? I am not sure I quite understand the charges on the monthly option of investment. Any help?
Read the question and solution again. Second fund is only one that allows monthly investment. To compare monthly/ single investment it's thus best to use the second one which has charges as: 4.75% of every investment; plus 0.5%pa ie everytime you make a deposit they deduct 4.75% of it, and put the rest into your account and as you earn "interest" they knock off 0.5%pa. Last monthly payment doesn't have nay time to earn investment returns/expenses (0.5%) and ignoring these gives a full 4.75% charge on that installment.
