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Find the annual percentage yield (APY) in the following situation.A bank offers an APR of 4.51% compounded monthlyThe annual percentage yield is?(Do not round until the final answer. Then round to two decimal places as needed.)

User Kurtzmarc
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1 Answer

4 votes

Given the question in the question tab, we can get the annual percentage yield by following these steps:

Step 1:


\begin{gathered} \text{Let P=\$1},\text{ then we have} \\ A=1*(1+(0.0451)/(12))^(12*1) \\ A=1.046044033 \end{gathered}

So the annual percentage yield becomes


APY=(1.046044033-1)/(1)=0.04604403302

Since APY is given in percentage, we convert to percentage, i.e,


\begin{gathered} 0.04604403302*100 \\ =4.604403302\text{ percent} \end{gathered}

Hence, annual percentage yield is 4.60 percent to two decimal places.

User Petr Gazarov
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8.3k points
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