Question

Bright Future Investment Fund has a balance of $1, 205 on January 1. On May 1, the balance is $1, 230. Immediately after this balance is noted, $800 is added to the fund. if there are no further contributions to the fund for the year and the time-weighted annual yield for the fund is 11.1%, what is the fund balance at the end of the year

Answer 1

The fund balance at the end of the year is $22,075.

Step-by-step explanation:

Let X denote the end-of-year balance. During the year, the balance grows as follows

1,205 → 1,230+ ($800) = 2,030

The time-weighted yield rate for the one yearperiod is 11.1%

11.1 =
`(1230)/(1205)` *
`(X)/(2030)`

1230x = 27152265

x =
`(27152265)/(1230)`

x = $22,075