Question

3. Gavin deposited money into his savings account that is compounded annually at an interest rate of 9%. Gavin thought the equivalent quarterly interest rate would be 2.25%. Is Gavin correct? If he is, explain why. If he is not correct, state what the equivalent quarterly interest rate is and show how you got your answer.

Answer 1

help please i dont understand this at all

Answer 2

@hallm Do you know what annual means?

Answer 3

no

Answer 4

Annual means year. So annually means yearly.

Answer 5

Do you know what a quarter is?

Answer 6

ok i understand that now

Answer 7

isnt quarter 1/4 of something

Answer 8

Correct

Answer 9

or 25% of something

Answer 10

So if the yearly rate is 9%. How much should the quarterly rate be?

Answer 11

umm 0.35???

Answer 12

How'd you get that number?

Answer 13

i divided 9% and 25%

Answer 14

You divided 9% by 25%?

Answer 15

yes sir

Answer 16

If you want the percentage of something, you multiply, not divide.
For example:
\[1 \times 25 percent = 1 \times 0.25 = 1 \times \frac{ 1 }{ 4 } = \frac{ 1 }{ 4 } \]

Answer 17

ohh i didnt know that i thought you divided

Answer 18

If you divide, you get...
\[1 \div 25 percent = \frac{ 1 }{ 0.25 } = \frac{ 1 }{ \frac{ 1 }{ 4 } } = 1 \times \frac{ 4 }{ 1 } = 4\]

Answer 19

Large different right?

Answer 20

yes that is a huge difference

Answer 21

I'm sorry. Got caught up with something. Did you see what you had to do?

Answer 22

no unfortunately not im still trying to understand

Answer 23

The quarterly rate should be 1/4 of the yearly rate.

Answer 24

ahh ok