Forget about #2 I figured it out
I need to get these two questions fully understood so could someone please answer them and explain thank you.
1) Madeleine works at a company that offers bonuses to its employees, depending on their performance. Madeleine is offered the choice of recieving four cheques of $300, one every 3 months throughout the year, or waiting until the end of the year and recieving a single cheque of $1300. Madeleine finds out that the highest interest rate offered by the banks os a guaranteed rate of 7.5% interest compounded quareterly. Illustrate Madeleine's choices using a timeline, to help her decide which bonus offer to accept.
2) Would you make more money by investing $100 a month at 12% interest compounded monthly for 5 years or by investing $1200 a year at 12% interest compounded annually for 5 years?
where r is the interest rate and n is the number times compounded per year and t is time (in years)
I'm guessing this is what you mean at time t=0 she gets 300 then in three months she gets 300 more,... so after nine months the company has given her $1200 dollars we want to know if she can make more money if she takes this option then the $1300 lump sum.
We know that so we get
We need to find out how much money she has after 3 months so (1/4 of a year) so we get
But now she gets another 300 from here company and invests it for another 3 months to get
again she gets 300 more so at 9 months she has
one more time to get for the year
So it is better to take the 1300 at the end of the years