Question

A bank features a savings account that has an annual percentage rate of 2.1% with interest compounded quarterly. Malachi deposits $7,500 into the account. What is the annual percentage yield (APY) for the savings account? APY= \%. Round to the nearest hundredth of a percent.

Answer 1

To calculate the annual percentage yield (APY) for the savings account with a 2.1% interest rate compounded quarterly, you can use the formula APY = (1 + (interest rate / number of compounding periods)) ^ number of compounding periods - 1. Plugging in the values will give you an APY of 2.13% (rounded to the nearest hundredth of a percent).

Step-by-step explanation:

To calculate the annual percentage yield (APY) for the savings account, you can use the formula:

APY = (1 + (interest rate / number of compounding periods)) ^ number of compounding periods - 1

In this case, the interest rate is 2.1% and the interest is compounded quarterly, so there are 4 compounding periods in a year. Plugging these values into the formula:

APY = (1 + (0.021 / 4)) ^ 4 - 1

Calculating this will give you an APY of 2.13% (rounded to the nearest hundredth of a percent).