A savings account has a rate of 2.25% . Find the effective annual yield of interest is compounded quarterly

Question

asked Feb 15, 2021 71.1k views

1 Answer

Klein Mioke · Answer 1 · 2021-02-22T05:07:31+0000

Answer:

The effective yield is 2.269% to the thousandth.

Explanation:

Effective annual yield compounded quarterly, given API

(1+API/4)^4 - 1

= (1+0.0225/4)^4 - 1

= 0.022691