- This topic has 1 reply, 2 voices, and was last updated 10 years ago by
.
Viewing 2 posts - 1 through 2 (of 2 total)
- Posts
Q:A building society adds interest to investors account even though interest rates are expressed in annual terms. The current rate of interest is 6% per annum.
An investor deposits $1000 on 1st January. How much interest will have been earned by 30th June?
A 30.00
B 30.38
C 60.00
D 300I am applying this formula : [ (1+r) ^ n -1 ] x 100
Please explain this answer to me in simple words…
You have not typed the whole question – I assume that they add interest monthly.
Assuming that to be the case, the monthly interest is 6%/12 = 0.5% (or 0.005)
Adding interest for 6 periods at 0.5% per period comes to:
1000 x (1.005)^6 = 1030.38
So the interest added is 30.38
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.