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17 votes
17 votes
Find the annual percentage yield of a saving account that pays 2.75% compounded quarterly

User Baryo
by
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1 Answer

22 votes
22 votes

Answer:

The annual percentage yield is of 2.78%.

Explanation:

Annual percentage yield of an account:

The annual percentage yield of an account compounded n times during the year with a decimal interest rate of r is given by:


image

Pays 2.75% compounded quarterly

This means that
image. So


image


image


image

0.0278 = 2.78%

The annual percentage yield is of 2.78%.

User Paljenczy
by
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