Question: if the interest rate is 6.50% what will be the amount of interest received if £500 is saved monthly for 1 year 

Answer: If you had a financial calculator this is what you would do ( I personally use 10BII).  Basically, first you are looking to find out the total amout you would have in your account after one year \n\ni=.54( that's 6.5% divided by 12 month)\nPMT= -500 ( what you put in every month)\nn=12 ( number of compounding periods in 1 yr)\nThen press FV, and you get\nFV= 6,181.44 ( that's the total amount in your account after 1 year , which includes the interest earned)\n\n 6,181.44-6000=181.44( that's the amount of interest earned after one yr).\nHope this helped
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