Review the Math Notes box in section 8.1.4

To solve the $2$% compounded quarterly for five years, first find the quarterly interest.

$\frac{.02}{4}=0.005$

The quarterly multiplier becomes $1.005$.
Now use some convenient amount of money to use as principal, say $$100$.
$t(n) = 100 · 1.005^{n}$
Now I'll evaluate the function after $5$ years, or when $n = 20$.
$t(20) = 100 · 1.005^{20}$
$t(20) = 110.49$
So this $$100$ will become $$110.49$ after $5$ years.

Use this method to compare the two options above for the time indicated.