Find the annual percentage yield (APY). A bank offers an apr of 2.3% compounded daily
To find the annual percentage yield (APY), we can use the formula:
APY = (1 + r/n)^n - 1
Where:
r = annual interest rate (in decimal form)
n = number of compounding periods per year
In this case, the annual interest rate (APR) is 2.3% and it is compounded daily. So we have:
r = 2.3% = 0.023 (in decimal form)
n = 365 (number of days in a year)
Using the formula, we can calculate the APY:
APY = (1 + 0.023/365)^365 - 1
≈ (1.0000631504)^365 - 1
≈ 0.0241436
Therefore, the annual percentage yield (APY) is approximately 2.41436%.
To find the Annual Percentage Yield (APY) for a bank offering an APR of 2.3% compounded daily, follow these steps:
Step 1: Convert the given APR to a decimal by dividing it by 100:
2.3% ÷ 100 = 0.023
Step 2: Determine the number of compounding periods per year. In this case, it's daily, so there are 365 compounding periods in a year.
Step 3: Use the following formula to calculate the APY:
APY = (1 + (APR / n)) ^ n - 1
Where:
APR is the annual percentage rate (0.023 in this case)
n is the number of compounding periods per year (365 in this case)
Step 4: Plug in the values and calculate:
APY = (1 + (0.023 / 365)) ^ 365 - 1
Step 5: Use a calculator to evaluate the expression:
APY ≈ 0.0234330857
Therefore, the annual percentage yield (APY) for the bank offering an APR of 2.3% compounded daily is approximately 0.0234330857, or approximately 2.34%.
To find the Annual Percentage Yield (APY) from the given information (APR of 2.3% compounded daily), we can use the formula:
APY = (1 + r/n)^n - 1
where:
- r is the annual interest rate (APR), expressed as a decimal (2.3% = 0.023),
- n is the number of compounding periods per year (in this case, since it is compounded daily, n would be 365).
Let's plug in the values and calculate the APY:
r = 0.023
n = 365
APY = (1 + 0.023/365)^365 - 1
Now, we can solve this equation using a calculator or a spreadsheet to find the APY.
APY ≈ 2.3363%
Therefore, the Annual Percentage Yield (APY) for the bank offering an APR of 2.3% compounded daily is approximately 2.3363%.