In the above image the compound interest we got is
x(1.04)^9
since its compounded every 4 months we divide the interest by 3 (as each year has 4 months)
is thats correct ?
I know even if we divide the rate by 3 the quantity B will be bigger just want to confirm if i am doing it correctly
No. There is no indication of four-month compounding in this question. Just multiply by 1.04 each time.
oh okay…if it says that the growth is 4% every 4 months does that mean that its the compound rate itself ( not exactly compound but the value that we get when we say it compounds every 4 months)
Kind of - rather than trying to fit this into the compound interest formula, try to understand what’s going on under the hood.
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got it thanks @Leaderboard
