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

User Paul Tsupikoff
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1 Answer

4 votes

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

User Klein Mioke
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