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In the following question, I found it difficult to calculate the monthly interest through the equation: 1 + R = (1 + r)^12. It seemed that a scientific calculator is required to calculate the answer via this equation because square root has to be taken to the power of 12.
Question: 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 year.
An investor deposits $1000 on 1 January. How much interest will have been earned by 30 June?
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