00:01
So this question says that i want to invest $60 ,000.
00:04
So i'm going to invest $60 ,000 into a pension plan.
00:12
So i have two different plans.
00:13
One plan offers 4 % compounded semi -annually.
00:26
And the other plan offers 3 .75 % continuously.
00:37
And i want to know which gives me more.
00:41
Money after six years.
00:44
So let's do semi -annually first.
00:47
So for semi -annually, i'm going to use the formula y equals a 1 plus my rate over how many times a year to how many times a year times time.
01:02
So i'm going to invest $60 ,000.
01:05
That's my a values, what i initially started with.
01:08
One plus.
01:09
Now for your rate, you always want to divide by $100 ,000.
01:14
To change that percent to a decimal.
01:16
So that's really going to be 0 .04.
01:20
N is how many times a year? so semi -annually is twice a year.
01:27
Another n.
01:30
So that's going to be twice again.
01:32
And t is six years.
01:35
So let's see how much money we have with this account.
01:38
So i'm going to clean it up a little bit.
01:40
So $60 ,000.
01:45
$04 divided by 2 is 0 .02.
01:49
1 .02.
01:51
2 times 6 is 12.
01:53
So let's plug that into my calculator and see what i get.
01:57
So i'm going to have 60 ,000 times 1 .02 raised to the 12th power...