00:01
Okay, i want to work out the final value of $1 ,000 invested for three years, of 5 % compounding quarterly.
00:08
The formula for this, the compound interest formula, a equals p over 1 plus r over n, power of nt.
00:19
Now, p is your starting amount.
00:21
Here is 1 ,000.
00:23
A, i want to find the end amount.
00:25
R is the rate of interest in decimal form, so 5%.
00:30
Will be 0 .05, divide 5 by 100.
00:36
N is a number of times you compound in a year.
00:40
We're compounding quarterly, which means every three months, so n is 4.
00:45
And t is number of years, which here is 3...