Question

If The APR Of A Savings Account Is 4.8% And Interest Is Compounded Monthly, What Is The Approximate APY Of The Account

Answer 1

4.91%.

Explanation:

Answer 2

`\bf ~~~~~~ \textit{Annual Yield Formula} \\\\ ~~~~~~~~~~~~ \left(1+(r)/(n)\right)^(n)-1 \\\\ \begin{cases} r=rate\to 4.8\%\to (4.8)/(100)\to &0.048\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{monthly, thus twelve} \end{array}\to &12 \end{cases} \\\\\\ \left(1+(0.048)/(12)\right)^(12)-1\qquad \approx \qquad 0.0490702075348 \\\\\\ 0.0490702075348\cdot 100\implies 4.90702075348\quad \approx\quad 4.91\%`