Question

What is the APY for a savings account with a $410 balance that receives $18 interest for the year?

Answer 1

4.39%

Explanation:

we know that

The APY is the return you can expect on your money after leaving it in the account for one year

The simple interest formula is equal to

`I=P(rt)`

where

I is the Final Interest Value

P is the Principal amount of money to be invested

r is the rate of interest

t is Number of Time Periods

in this problem we have

`t=1\ year\\ P=\$410\\I=\$18\\r=?`

substitute in the formula above

`18=410(r)(1)`

`18=410(r)`

`r=18/410`

`r=0.0439`

Convert to percentage form

`r=0.0439*100=4.39\%`