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A bank advertises an interest rate of 4% per year, compounded monthly
Page 7
What is the APY?
The units are percent, but do not enter the % sign. Round 2 decimal places,
Note: if your answer is 5.24%, then enter only 5.24

Respuesta :

Given :

Interest rate , r = 4 %.

To Find :

The APY .

Solution :

APY is given by :

[tex]APY=(1+\dfrac{r}{n})^n-1[/tex]

Here , r is compound interest and n is number of time compounded .

So ,

[tex]APY=(1+\dfrac{r}{n})^n-1\\\\APY=(1+\dfrac{4}{12})^{12}-1\\\\APY=30.57\%[/tex]

Therefore , APY is 30.57 % .

Hence , this is the required solution .

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