The Orange County Teachers' Credit Corp. offers an account which pays 14% compounded quarterly. What is its effective rate of yield?
APY =((1+r)^n - 1)*100%,
r=14% / 4 = 3.50% = 0.0350 = Quarterly
% rate expressed as a decimal.
n = 4 comp/yr * 1yr = 4 compounding
periods.
APY = ((1.0350)^4 - 1)*100% = 14.75% = Annual Percentage Yield.
Int = 1.1475 - 1.00 = 0.1475,