Q:A fund earning 9% effective has a balance of $4,500 at the beginning of the year. If $500 is added to the fund at the end of three months and if $300 is withdrawn from the fund at the end of nine months, find the balance at the end of the year under the simple interest assumption.
My answer is: the total interest that will accumulate is 9%*4500 = 405. So 4500+500-300+405=5105.
But the correct answer is 5132. I don't understand how they get this answer.
Thanks.
My answer is: the total interest that will accumulate is 9%*4500 = 405. So 4500+500-300+405=5105.
But the correct answer is 5132. I don't understand how they get this answer.
Thanks.