We are given a a savings and loan investment that offers a monthly compounding rate with an annual percentage yield (APY) of 5.25%.
We are now required to use this information to calculate the nominal rate of interest compounded monthly.
The compound interest formula for monthly compounding is given as;

Where the variables are;

However, where we have the annual percentage yield already given, we can use that information to calculate the annual rate of interest as given by the formula below;

The variables given are;

Substituting these into the formula we now have;
