MATH

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Mabel has $35,000 to invest in a certificate of deposit for 4 years. The certificate of deposit earns interest at 4.75% compounded daily. What is the annual percentage yield to the nearest thousandth of a percent?

  • MATH -

    All we need is the 4.75% per annum compounded daily

    Let the equivalent annual rate be i

    1+i = (1 + .0475/365)^365
    1+i = 1.0486429...

    So the annual rate is 4.864 %

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