A basic savings account pays interest once per year on December 31. If Alan deposits $300 into the account on January 1, 2004, and does not deposit or withdraw any money in the meantime, then to the nearest cent, how much was in the account when he withdrew the money on January 1, 2009?

(1) The savings account interest rate is 2% per year

(2) If Alan had left the money in the account for 2 more years, he would have had, to the nearest cent, $13.12 more.

The answer is D.

For statement (2), the book explains the equation as $300(1+i)6 - $300(1+i)4= 13.12.

But, I think n should be 7 and 5 and be squared, not multiplied: $300(1+i)^7 - $300(1+i)^5= 13.12

Can anyone answer this??

by the way, do you guys see many errors in the

Princeton Review?? Because I have found many....;;

The second statement must give the same interest of 2% as given in the first statement. Taking this into account the book also means compound interest because only from 300(1+x)^6 - 300(1+x)^4= 13.12 you get x=0.02. But I agree it should be 7 and 5, not 6 and 4. Overall not a good question.