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Find the annual percentage yield in (APY) in the following situation. A banks offers an APR of 3.7% compounded daily. The annual percentage yield is what percent?

Find the annual percentage yield in APY in the following situation A banks offers an APR of 37 compounded daily The annual percentage yield is what percent class=

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Solution

For this case we can do the following:

[tex]A=1\cdot(1+\frac{0.037}{365})^{365\cdot1}=1.0376[/tex]

Then we can find the APY on this way:

[tex]\text{APY}=\frac{1.0376-1}{1}\cdot100=3.769[/tex]

Rounded would be:

3.77%