Question

$1,000,000 is deposited in a bank today, October 1, for five months at a rate of 2¼%. What are the proceeds?
Please show your calculation process to get partial credits.

Answer 1

Invested Amount for 5 months = $1,000,000

Calculating the Future value or Proceeds at the end of Five months:-

Where,

r = Interest rate = 2¼% or 2.25%

n= no of periods =5 months

m = no of times compounding in a year = 12 (Assuming compounded monthly)

Future Value = $1009,410.22

So, the proceeds is $1009,410.22

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