Determine the annual percentage yield, or the effective interest rate, for $600 invested at 6.91% over 10 years compounded daily. Round your answer to the nearest hundredth of a percent, if necessary.
To calculate the annual percentage yield, use the formula:
APY = (1 + (r/n))^n - 1
Where:
r = annual interest rate (6.91% or 0.0691)
n = number of compounding periods per year (365 since it is compounded daily)
APY = (1 + (0.0691/365))^365 - 1
APY = (1 + 0.0001896)^365 - 1
APY = (1.0001896)^365 - 1
APY ≈ 1.069988 - 1
APY ≈ 0.06999
Therefore, the annual percentage yield for $600 invested at 6.91% over 10 years compounded daily is approximately 6.99%.