# APY-math

find the annual percentage yield (to the nearest 0.01%). a bank offers an APR of 3.1% compounded daily.

1. e^(rt) = e^(.031 * 1)

posted by Scott
2. thank you

posted by JT
3. let the equivalent annual rate be i
daily rate = .031/365 = .000084931
1.000084931^365 = 1+i
1+i = 1.031484143
i = annual = .03148

annual rate = .03148 or appr 3.15%

Scott's answer would be the instantaneous rate at .0314855
which of course would be very close to the daily compounded rate

posted by Reiny

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