MATH SOLVE

3 months ago

Q:
# Find the annual percentage yield (APY) in the following situation. A bank offers an APR of 4.4% compounded daily. The annual percentage yield is (blank) %

Accepted Solution

A:

[tex]\bf ~~~~~~ \textit{Annual Yield Formula} \\\\ ~~~~~~~~~~~~ \left(1+\frac{r}{n}\right)^{n}-1 \\\\ \begin{cases} r=rate\to 4.4\%\to \frac{4.4}{100}\dotfill &0.044\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{daily then 365} \end{array}\dotfill &365 \end{cases} \\\\\\ \left(1+\frac{0.044}{365}\right)^{365}-1~~ \approx 0.0449796\implies \stackrel{\textit{rounded up}}{0.045}\implies \stackrel{\textit{to percent}~\hfill }{0.045\cdot 100\implies 4.5}[/tex]