Question

A bank features a savings account that has an annual percentage rate of 4.4 % with interest compounded quarterly. Natalie deposits $4,000 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

4.47%

EXPLANATION :

The APY Formula is :

`APY=\left(1+(r)/(n)\right)^n-1`

where r = annual percentage rate

n = number of compounding in a year

From the problem, r = 4.4% or 0.044 and n = 4 (Quarterly)

That will be :

`\begin{gathered} APY=\left(1+(0.044)/(4)\right)^4-1 \\ APY=0.0447 \end{gathered}`

The APY is 4.47%