Sir,
A building society adds interest monthly to investors' accounts even though interest rates are expressed in annual terms. The current rate of interest is 6% per annum.
An investor deposits $1000 on 1 January. How much interest will have been earned by 30 June?
The revision kit answer is :
$1000 x (1.005)^6 - $1000 = $30.38.
But the formula in text book is FV=PV x (1+r)^n
Cloud you guide me how to get the answer?
ACCA Forums
MAF2
Additional question from me. As we known n = number of periods. But sometime n = month, sometime n=year. Could you make me clear on this issue?
9y ago#2You must ask in the Ask the Tutor Forum if you want me to answer. This forum is for students to help each other :-)
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