Calculate Future Value of Term Deposit

21 Dec 2023

What is the future value of Suzette's term deposit?

a) $256.06
b) $257.50
c) $259.31
d) $261.20

The future value of the deposit can be calculated using the formula for compound interest.

To calculate the future value of Suzette's term deposit, we can use the formula for compound interest:

FV = PV * (1 + r/n)^(n*t)

Where:
FV = Future Value
PV = Present Value
r = Annual Interest Rate
n = Number of times interest is compounded per year
t = Number of years

In this case, Suzette invested $250 in a 240-day term deposit at 2.75% p.a. We need to convert the term into years by dividing 240 days by 365 days:

Term in years = 240 days / 365 ≈ 0.6575 years

Now, we can plug in the values into the formula:

FV = $250 * (1 + 0.0275/365)^(365*0.6575) ≈ $259.31

Therefore, the correct answer is c) $259.31. Suzette's term deposit will have a future value of $259.31.