What is the annual percentage yield (APY) for money invested at the given annual rate? Round results to the nearest hundredth of a percent:
-3.5% compounded continuously.
A) 3.55%
B) 3.56%
C) 3.53%
D) 3.50%

Question

Quizplus · Accepted Answer

The formula for calculating the annual percentage yield (APY) for an interest rate compounded continuously is given by $APY = e^r - 1$, where $e$ is the base of the natural logarithm (approximately 2.71828), and $r$ is the annual interest rate expressed as a decimal. For a 3.5% interest rate, $r = 0.035$. Plugging this into the formula gives $APY = e^{0.035} - 1 \approx 0.03556$, or 3.56% when converted to a percentage and rounded to the nearest hundredth.

What Is the Annual Percentage Yield (APY) for Money Invested