An Easy Calculation?

Question

This should be easy. I've been assured that this is correct, but I don't see how.

$\$40,000$ plus a $\$200.00$ administrative fee plus $3\%$ for four months on $\$40,200 = \$40,602$.

I think it should be $40,000 + 200 + (0.03 \times 40,200 \times 4) = 45,024$ Who is right?

Answer 1

Notice that

$$\frac{40602}{40200}=1.01,$$

corresponding to $4\cdot\dfrac{3}{12}\%$.

Answer 2

Explaining one of the comments a bit more... $3\%$ is the annual rate. Since we only have 4 months it is
$40,000 + 200 + (0.03 \times 40,200 \times 4/12) = 40,602 $

where $4/12$ is there because we only care about 4 out of the 12 months.

Answer 3

I believe 3% is the annual rate. So, because we only have 4 months we get 4/12 or 1/3 of the year so the equation would be:

40,000+200+(0.03×40,200×1/3)=40,602

I hope this helped you understand this at least a little bit more.