Solve the problem.
-Miguel invests his money in a savings account which gives an effective annual yield of 3.5%. The nominal rate is 3.45%. How often does compounding occur - daily, monthly, quarterly, or
Semiannually?

Question

Quizplus · Accepted Answer

The effective annual yield is 3.5% and the nominal rate is 3.45%. The difference between the two rates is 0.05%. This means that the compounding occurs quarterly, since 0.05% is equal to 1/24 of 1%.

Solve the Problem. -Miguel Invests His Money in a Savings Account Which Gives