The net asset value (NAV) of an open-end investment company is $22.20 and its sales charge is 8%. What is the public offering price?

To determine the public offering price (POP) of an open-end investment company when given the net asset value (NAV) and the sales charge, you can use the formula:

[ \text{POP} = \frac{\text{NAV}}{1 - \text{Sales Charge}} ]

In this case, the NAV is $22.20, and the sales charge is 8% (or 0.08 as a decimal).

First, calculate the denominator:

[ 1 - 0.08 = 0.92 ]

Next, divide the NAV by this value:

[ \text{POP} = \frac{22.20}{0.92} \approx 24.13 ]

Thus, the public offering price is approximately $24.13. This indicates that after adding the sales charge, investors will pay about this amount for the shares.

This makes sense within the context of the question, as the public offering price reflects the amount an investor pays upon purchasing shares, incorporating the sales charge that compensates the investment company for distributing and managing the fund.