Find the annual percentage yield (APY).
A bank offers an apr of 2.3% compounded daily
To find the annual percentage yield (APY) for a bank offering an APR of 2.3% compounded daily, you need to use the following formula:
APY = (1 + r/n)^n - 1
Where:
APY is the annual percentage yield
r is the annual interest rate as a decimal (in this case, 2.3% = 0.023)
n is the number of compounding periods per year (in this case, since it is compounded daily, n = 365)
Plugging in the values:
APY = (1 + 0.023/365)^365 - 1
Using a calculator, you can find:
APY ≈ 0.0232 or 2.32%
Therefore, the annual percentage yield (APY) for a bank offering an APR of 2.3% compounded daily is approximately 2.32%.
To find the Annual Percentage Yield (APY), we need to determine the effective annual interest rate, taking into account the compounding frequency.
First, we'll convert the APR (Annual Percentage Rate) to a decimal by dividing it by 100: 2.3% / 100 = 0.023.
Next, we'll find the daily interest rate by dividing the APR by 365 (the number of days in a year): 0.023 / 365 = 0.0000630137.
To calculate the daily compounding rate, we add 1 to the daily interest rate: 1 + 0.0000630137 = 1.0000630137.
To find the APY, we raise the daily compounding rate to the power of 365 (representing the number of compoundings in a year): (1.0000630137)^365 = 1.025.
Finally, we convert the result to a percentage by subtracting 1 and multiplying by 100: (1.025 - 1) * 100 = 2.5%.
Therefore, the Annual Percentage Yield (APY) for this bank with a 2.3% APR compounded daily is 2.5%.
To find the annual percentage yield (APY), you need to consider the compounding frequency of the interest. In this case, the bank offers an annual percentage rate (APR) of 2.3%, compounded daily.
The formula to calculate APY is:
APY = (1 + r/n)^n - 1
Where:
r is the annual interest rate (APR) as a decimal (2.3% = 0.023)
n is the number of compounding periods in a year (365 for daily compounding)
Plugging in the values:
APY = (1 + 0.023/365)^365 - 1
Now, let's calculate it step-by-step:
First, calculate (1 + 0.023/365):
1 + (0.023/365) = 1.0000630137
Next, raise the result to the power of 365:
(1.0000630137)^365 = 1.0231693036
Finally, subtract 1 from the result:
APY = 1.0231693036 - 1 = 0.0231693036
So, the annual percentage yield (APY) for this bank's offer is approximately 2.32% (or 0.0231693036 as a decimal).