Solve the problem.
-Consider an account with an APR of 4%. Find the APY with quarterly compounding, monthly compounding, and daily compounding.

Question

Quizplus · Accepted Answer

The APY can be calculated using the formula APY = (1 + r/n)^(n*t) - 1, where r is the annual interest rate (APR), n is the number of compounding periods per year, and t is the time in years. For quarterly compounding (n=4), monthly compounding (n=12), and daily compounding (n=365), the APYs are slightly higher than the APR due to the effects of compounding, resulting in APYs of approximately 4.06%, 4.07%, and 4.08% respectively.

Solve the Problem. -Consider an Account with an APR of 4%. Find the 4