Question

Lainey puts $600 into a GIC for 5 years. The GIC pays 6.2% interest, compounded monthly. How much interest has she earned after 5 years?

Answer 1

FV= $819.03

Explanation:

Giving the following information:

Initial investment= $600

Number of periods= 5*12= 60 months

Interest rate= 0.062/12= 0.0052

To calculate the future value of the investment, we need to use the following formula:

FV= PV*(1+i)^n

FV= 600*(1.0052^60)

FV= $819.03