What is the APY for 6.25% compounded daily?
A) 6.25%
B) 6.45%
C) 6.95%
D) 7.25%

Question

Quizplus · Accepted Answer

The APY (Annual Percentage Yield) can be calculated using the formula APY = (1 + r/n)^(n*1) - 1, where r is the annual interest rate (as a decimal), and n is the number of compounding periods per year. For a 6.25% interest rate compounded daily, r = 0.0625, and n = 365. Plugging these values into the formula gives APY = (1 + 0.0625/365)^(365*1) - 1 ≈ 0.0645 or 6.45%.

What Is the APY for 6.25% Compounded Daily