Answer:
c. quarterly
Step-by-step explanation:
To start with 1 year is equal to twelve months
3months out of 12 months will be;
3/12= 1/4
Here it is compounded quarterly and n=4 where n is the number of compoundings a year.
Lets study the compound interest formula;
[tex]A=P(1+\frac{r}{n} )^{nt}[/tex]
where;
A=The ending amount
P=Starting amount
r=rate of interest expressed as a decimal
n=number of compoundings a year
t=total number of years
The number of compoundings in any one year can be an interest compounded yearly where n=1, semi-annually with n=2, quarterly where n=4, monthly where n=12, weekly and n=52 and finaly daily with n=365.
