- This topic has 2 replies, 2 voices, and was last updated 8 years ago by
.
Viewing 3 posts - 1 through 3 (of 3 total)
- Posts
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?
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?
Viewing 3 posts - 1 through 3 (of 3 total)
- You must be logged in to reply to this topic.