Answer:
7.25%
Step-by-step explanation:
n=1000
Effective yield, y is given by
[tex]y=(1+\frac {r}{n})^{n}-1[/tex] where r is percentage rate expressed in decimal points, n is the duration
Substituting 1000 for n and 0.07 for r we obtain
[tex]y=(1+\frac {0.07}{1000})^{1000}-1[/tex]
y=0.0725055537
Therefore, yield is [tex]0.0725055537*100=7.25055537%\approx 7.25%[/tex]
