Question

What is the Annual Percentage Yield (APY) for a 36-month CD purchased for $10,000 with an APR of 4.4% compounded quarterly?

a) 4.4%

b) 4.55%

c) 4.6%

d) 4.75%

Answer 1

To calculate the Annual Percentage Yield (APY) for a 36-month CD with an APR of 4.4% compounded quarterly, use the formula APY = (1 + (r/n))^n - 1, where r is the APR and n is the number of compounding periods per year. Plug in the values into the formula to find the APY.

Step-by-step explanation:

To calculate the Annual Percentage Yield (APY) for a 36-month CD with an APR of 4.4% compounded quarterly, you can use the formula APY = (1 + (r/n))^n - 1, where r is the APR and n is the number of compounding periods per year. In this case, r = 4.4% = 0.044 and n = 4 (compounded quarterly).

Plug in these values into the formula: APY = (1 + (0.044/4))^4 - 1 = (1.011)^4 - 1 = 1.0443 - 1 = 0.0443 (or 4.43%).

Therefore, the Annual Percentage Yield (APY) for the 36-month CD is 4.43%.