A passbook savings account has a rate of 8 %.Find the effective annual​ yield, rounded to the nearest tenth of a​ percent, if the interest is compounded semiannually.The effective annual yield isA passbook savings account has a rate of 8 %.Find the effective annual​ yield, rounded to the nearest tenth of a​ percent, if the interest is compounded semiannually.The effective annual yield is ___​%.

Question
Asked Jan 29, 2019

A passbook savings account has a rate of 8 %
.
Find the effective annual​ yield, rounded to the nearest tenth of a​ percent, if the interest is compounded semiannually.
The effective annual yield isA passbook savings account has a rate of 8 %
.
Find the effective annual​ yield, rounded to the nearest tenth of a​ percent, if the interest is compounded semiannually.
The effective annual yield is ___​%.

check_circleExpert Solution
Step 1

Let’s assume the final amount given in the passbook is A.

The given data is rate of interest 8%, time is 1 year and compound semiannually.

Now we know the formula as shown on the board.

Here P = principal amount

          r = rate of interest (in decimals)

          n = number of times compounded annually

          t = time (In years)

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Step 2

Now we put the values in the formula

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Step 3

When compounded semiannually then per...

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