00:01
Okay, dewey sykes, he's planning on opening a business in four years when he retires.
00:07
We need to find out how much he has to invest today in order to have $9 ,000 when he retires if the bank pays 2 % compounding quarterly.
00:20
Okay, so what do we know? we know that the number of periods are going to be n, which is going to be four years times.
00:35
Four periods or four quarters per year, that's going to give us 16 periods.
00:50
Okay, we also know that our rate, they said was 2 % annually, so we need to divide that by 12.
00:59
And that's going to come up, excuse me, not 12.
01:01
We want to divide by four because it's quarterly, not monthly.
01:08
So we're going to divide this by four.
01:10
And that's going to give us 0 .5%.
01:17
Okay, we know that our future value is equal to 9 ,000 because that's how much you want to have after the four years...