Doubt Week 1 day 2 Percentage lecture at 47:10

[pspatel602]

Question: $1000, 12% compound every 3 month

So if we divide 12/3 = 4%. This 4% is consider for single 3 month period, so my question is there are total 4 quarters of 3 months in a year, so if we add 4 + 4 + 4 + 4 = 16% which is above of the total interest of the year.
Sir said 12% in one year then how much % in 3 months so he divided 12/3 = 4 % for 3 month.
But logically for 12 months => 12%
3 months => ? So the answer might be (3 * 12) / 12 = 3% for three months.
How it is possible? Please correct my understanding

[HoldMyBeer]

@pspatel602

$1000, 12% compound every 3 month

A = \text{P} \times(1+\frac{r}{n})^{nt}

A	=	final amount
P	=	initial principal balance
r	=	interest rate in decimal
n	=	number of times interest applied per time period
t	=	number of time periods elapsed

Now, you’re missing the ‘t’.
otherwise, your answer would’ve been :
A = \text{1000} \times(1+\frac{0.12}{3})^{3t}