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Imagine a local bank representative is assisting you with establishing an account. The account you two are discussing has an APR of 6.5%. Determine the APY with quarterly compounding and with monthly compounding. How does changing the compounding period affect the annual yield?

  • math -

    say $100 apr 6.5 simple = 6.50%

    at 6.5 quarterly
    (.065/4 +1)^4 = 1.0667 so 6.67 %

    at 6.5 monthly
    100 (.065/12 +1)^12 = 1.06697 so 6.70%

  • math -

    uncomplete need to know APY after find the value of A

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