00:01
So here i want to draw a time diagram.
00:04
Here is zero, here is one, two, three, four, five, six, seven, eight, nine, ten, eleven, twelve, thirteen.
00:22
And i'm going to make, let's see here, five level deposits every other year with the first one due immediately.
00:29
So a deposit here and every other year gives me five deposits at times zero, two, four, six, and eight.
00:41
And then i'm going to make sixteen withdrawals of a thousand dollars with the first one to be at one quarter from the last deposit.
00:54
So that means that i'm going to do this quarterly, so eight and a quarter, eight and a half, eight and three quarters.
01:04
I'm going to have w, w, w, w, and then w, w, w, w, w, w, w, w, that is twelve, and then one, two, three, and four, w, w, w, and w.
01:35
And our w is one thousand, and our interest rate, r, is ten percent annual.
02:02
That means that our quarterly interest rate, i, satisfies one plus i, two to fourth, is one plus r.
02:24
So, or i over four, so quarterly compounded rate, i should say.
02:35
So that means that one plus i over four is one plus r to the one fourth...