I was watching the Fractions, Decimals, Percents, Ratios Part 2 video of the 2-month plan and somebody asks a question about 12% interest compounded every 3 months and the formula provided is 100*(1.04), but my understanding is that a 3-month period happens 4 times a year so 12/4=3 and also if I am getting 12% in 12 months then it is one percent per month so 3 months is 3%, so my understanding was 1*(1.03). Can anybody help me with where my thinking is going wrong? Thanks!

we discussed this before, check this post out

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Thanks!

I went to the link mentioned. I saw the video, but still it makes no sense to me.

I still think what toniitis posed is an issue, with the logic of previous problems.

Greg asks, “every three months how much of the percentage am I getting?”

The student replies 4 and Greg goes on to write 1000(0.04).

But how can we get 4 percent every three months if the total percentage increase per year is 12% and it compounds every 3 months, i think it should be: 1000(1.03)^4 as @toniitis is mentioning.