A customer has a savings account for one year.During the year he earns $65.50 in interest.For 180 days he has $2,000 in the account and for another 180 days he has $1,000 in the account.What is the annual percentage yield on this savings account?
A)6.55%
B)3.28%
C)4.42%
D)8.73%
E)None of the options is correct

Question

Quizplus · Accepted Answer

To calculate the annual percentage yield, we need to find out what the total amount of money in the account was for the entire year.

For the 180 days when the balance was $2,000, the interest earned was:

$2,000 x (r/365) x 180 = $360r/365

Where r is the interest rate as a decimal.

For the 180 days when the balance was $1,000, the interest earned was:

$1,000 x (r/365) x 180 = $180r/365

So the total interest earned for the year was:

$360r/365 + $180r/365 = $540r/365

We know that this total equals $65.50, so we can solve for r:

$540r/365 = $65.50

r = 0.0442 or 4.42%

Therefore, the annual percentage yield is 4.42%, which is option C.

A Customer Has a Savings Account for One Year