Question

If the APR OF A SAVINGS ACCOUNT IS 2.7% and is compounded quarterly what is the approximate APY of the account?

Answer 1

Answer:2.7275%

Step-by-step explanation: A P E X

Answer 2

the approximate APY of the account is 2.73%

Explanation:

We know the formula for APY which is given by

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

here, r= interset rate = 2.7% = 0.027

n = compounding cycles = 4

On plugging these values in the above formula, we get

`APY=(1+( 0.027)/(4) )^4-1`

`=(1+0.00675)^4-1\\\\=(1.00675)^4-1\\\\1.027274607-1\\\\=0.02727`

On simplifying this we get

0.02727 = 0.02727*100

= 2.73%

Therefore, the approximate APY of the account is 2.73%