6. When previously earned interest is added to an investment and then allowed to earn more interest, we say that the interest is compounded. Compounding interest increases the effective interest rate of an investment compared to simple interest, where the interest earned is not added to the investment to earn additional interest. The annual percentage yield, or APY, gives the effective interest rate on an investment based on the number of times the interest is compounded in a year, n, and the interest rate, r, as a decimal. APY = | 1 +-)-1 Find the annual percentage yield if the interest rate is 4% and interest is compounded monthly. State the answer as a percent rounded to the nearest hundredth.

Question
6. When previously earned interest is added to an investment and then allowed to
earn more interest, we say that the interest is compounded. Compounding interest
increases the effective interest rate of an investment compared to simple interest,
where the interest earned is not added to the investment to earn additional interest.
The annual percentage yield, or APY, gives the effective interest rate on an investment
based on the number of times the interest is compounded in a year, n, and the interest
rate, r, as a decimal.
APY = | 1 +-)-1
Find the annual percentage yield if the interest rate is 4% and interest is compounded
monthly. State the answer as a percent rounded to the nearest hundredth.
Expand
Transcribed Image Text

6. When previously earned interest is added to an investment and then allowed to earn more interest, we say that the interest is compounded. Compounding interest increases the effective interest rate of an investment compared to simple interest, where the interest earned is not added to the investment to earn additional interest. The annual percentage yield, or APY, gives the effective interest rate on an investment based on the number of times the interest is compounded in a year, n, and the interest rate, r, as a decimal. APY = | 1 +-)-1 Find the annual percentage yield if the interest rate is 4% and interest is compounded monthly. State the answer as a percent rounded to the nearest hundredth.

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Math
Algebra

Related Algebra Q&A

Find answers to questions asked by students like you.

Q: Let x represent one number and let y represent the other number. The sum of two numbers is 9. If one...

A: Given x and y are two numbers.Sum of x and y= x+y. So, x+y=9

Q: Graph the solution to the following inequality on the number line. x(x-5)<=0

A: To graph the solution of the inequality x(x-5)<0 on the number line.

Q: Consider the arithmetic sequence with the first term ai = 300 and common difference d=-90. What are ...

A: In an arithmetic sequence the terms can be obtained by adding the common difference to the previous ...

Q: (3/-6) (-11V-10) 11V - 10

A: To calculate the value of the provided expression which is shown below,

Q: Simplify the difference quotients f(x+h) - f(x)/h and f(x)-f(a)/(x-a) for the following function by ...

A: Given:The function is 

Q: Given the following function (a) find the vertex (b) determine whether there is a maximum or a minim...

A: Note: This question consists of 4 sub parts, we are authorized to answer up to 3 subparts, so we are...

Q: Write the equation of the line that has slope m = − 1 and passes through the point (0, 2) . Explain ...

A: Refer to the question the line has slope m = -1 and it passes through the point (0, 2).Then consider...

Q: How many quarts of pure antifreeze must be added to 7 quarts of 40% antifreeze solution to obtain a ...

A: Let us add x quarts of pure antifreeze to the 7 quarts of 40% antifreeze, to achieve 50% antifreeze ...

Q: Divide   −4x2−2x+14    by   2x+3 Write your answer in the form:   −4x2−2x+14=(2x+3)×q(x)+r(x)    −4x...

A: Click to see the answer

Q: Use the given function to complete parts (a) through (e) below. fox)-x-9x FX a) Use the Leading Coef...

A: Since the option B’s choices are not visible, I have found only the x-intercepts.

Q: Explain how f (x) = (x − 1)2 + 3 is obtained from f (x) = x2.

A: Given f(x)=x^2, to obtain f(x)=(x-1)^2 from f(x)=x^2 we have to shift the graph to 1 unit right. 

Q: Evaluate. (8^2-2^5)/(24/6)+3^2

A: To calculate the value of the provided expression (8^2-2^5)/ (24/6) +3^2. First simplify the bracket...

Q: Word Problems: 1) The Golden Gate Bridge in San Francisco is 2604 feet longer than the Brooklyn Brid...

A: 1.Let the height of Brooklyn bridge be x.Let the height of Golden Gate bridge be y.

Q: Fill in the blank to make the expression a perfect square. 2 12y X

A: The given expression is,

Q: Hello, looking for the easiest steps to solve 2 and 3 step multiplication questions. For example 275...

A: To multiply a three-digit number with a two-digit number follow the given steps.The numbers to be mu...

Q: I am having a math confusion here b2-a over ad+3c a=-2b=5c=-1d=3 I keep coming up with 12 over -9 th...

A: To calculate the value of b2-a over ad+3c where, the value of a=-2, b=5, c=-1 and d=3. Now, substitu...

Q: Let D = {b, a, c, k}, E = {t, a, s, k}, F = {b, a, t, h}. Using these sets, find the following:20. F...

A: Let us consider the universal set as set of all alphabets. Then F^c contains all elements os U excep...

Q: Find the inverse function of the following: h=f(t)=96t-16t^2

A: It is given that the function h = f(t) = 96t – 16t2.Obtain the inverse of f(t) = 96t – 16t2 as follo...

Q: 200 divided by 900 multiply by 100 written as a percentage without a fraction

A: Given statement:200 divided by 900 multiply by 100

Q: #37 A faucet can fill a tub in 12 minutes. The leaky drain can empty the tub in 30 minutes. If the f...

A: Click to see the answer

Q: O SYSTEMS OF LINEAR EQUATIONS Paul Solving a word problem using a system of linear equations of. Esp...

A: Given information:Deandre the trainer has two solo workout plans that he offers his clients: Plan A ...

Q: Determine whether the function has an inverse function. If it does, find the inverse function. ​f(x)...

A: The function is given by,

Q: Solve for x: 3x+1 = 27

A: The equation is given by,

Q: Given the function f(x) = vx-7, (a) Find f (x) (b) Graph f and f (c) Use interval notation to give t...

A: We first replace f(x) by y. Then we switch x and y and solve for y. This new y is replaced by f^-1(x...

Q: For f(x) vx and g(x)=x-4, find the following functions. a. (fo g)(x), b. (gof(x); c. (f o g)(5); d. ...

A: Given that two function:

Q: For what value of x is ​g(x)=−5​? please see attached

A: We first find the point which has y=-5That point is (6,-5)

Q: How do I solve 6x/x-6 =9 +7x2/x-6?

A: Click to see the answer

Q: Solve the following logarithmic equation. Be sure to reject any value of x that is not in the domain...

A: First we use the definition of logarithm to get rid of log. 

Q: Use the graph to determine (a) open intervals on which the function is increasing, if any. (b) open ...

A: Given graph is,

Q: Condense the expression to the logarithm of a single quantity 1/2 [log 4 ( x +1) +2log 4 ( x −1)] +6...

A: Given, 

Q: How ti solve? Step by step

A: Simplify the given expression as follows.

Q: I am not sure how to ask a question on equuivalent Fractions

A: Equivalent fractions are the fractions with different numerators and denominators that represents th...

Q: Factor the algebraic expression 4/10 1/10 X - X

A: Given algebraic expression is,x4/10-x1/10

Q: Solve the system. If there is no solution or if there are infinitely many solutions and the system's...

A: The given system of equations are,

Q: Does the relation y(x + y) = 1 specify a function? Explain.

A: From y(x+y)=1 we try to solve for y first.  Used the quadratic formula to solve for y.

Q: For each equation, determine whether it represents a direct variation, an inverse variation, or neit...

A: The given equations are xy = 2 and 10/y = x.

Q: Graph the hyperbola (y+3)2/16-(x+6)2/4=1

A: The given equation is (y+3)2/16-(x+6)2/4=1.

Q: Solve the inequality using a graphing utility. X+ 1 s2 X- 2 Graph the given inequality using a graph...

A: Calculation:Use a graphing calculator and obtain the graph of the given rational function as shown b...

Q: Sketch the graph of f (x) = 3 x +1

A: The given function is,

Q: Why do we need to fill in the second row before we fill the formula down?

A: In any question which demand the excel sheet the first step is to be all the data as the formulas wo...

Q: ( The length of a rectangular garden is two feet longer than its width)        (A) Label each edge o...

A: part(a)The length of a rectangular garden is two feet longer than its width.Let the width of the rec...