00:01
You want to invest some money.
00:01
You want to know which one is going to be best.
00:03
5 % simple interest, 4 % compounded per year.
00:09
We want 3 % compounded semi -annually, and 2 % in quarters.
00:15
So what we're going to do is use the following formula.
00:18
We can do it for all of them except simple interest.
00:21
And that's going to be a equals p, 1 plus i to the n.
00:25
So in this first one, we're just going to assume we're going to invest $100.
00:28
Dollars.
00:29
So a would be 100, 1 plus 0 .04, and we're doing this for two years.
00:35
Here we're going to have our 100, and we're going to go 1 plus, now since this is semi -annually, we're going to go 0 .03 over 2, and there's four periods in two years.
00:48
Here we're going to go 100, and we're going to go 1 plus 0 .02, divided by 4 because there's quarterly, and there'll be eight periods in those two years.
00:58
So let's go do those first.
01:00
So i'm going to have 100 and then 1 plus .04, and we're going to raise that to the second power.
01:06
That means you'd end up with $108 .16...