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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Baumol model followup
So sir are the below 2 formulae correct and can it be applied in all Baumol model questions?
1) Interest lost on investment which we calculated by
Interest rate on investment (%) multiply by (Investment sold at start of year + cumulative investment sold at end of year) / 2
2) Interest earned on bank balance which is calculated by
(interest earned on bank balance (%) multiply by investment sold each time) /2
Correct
