Question

If the Wet Dog Surf Company borrows $11,000 at 3.00% and there are 4 compounding periods per year, calculate Wet Dog's Effective Annual Rate (APY) of interest.

Answer 1

3.039%

Step-by-step explanation:

Effective annual interest = ( 1 + periodic interest/ m)^m - 1

M = number of compounding per year

(1 + 0.03 / 4)^4 -1 = 0.03039 = 3.039%

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