Garrett deposits $8000. Determine the APY if there is an APR of 8.5% compounded weekly. Express your answer as a percentage rounded to the nearest hundredth of a percent, if necessary.
To find the APY, we need to consider the effect of compounding on the APR. The formula for APY is:
APY = (1 + (APR/n))^n - 1
where APR is the annual percentage rate and n is the number of compounding periods per year.
In this case, APR = 8.5% and n = 52 (since compounding is weekly).
Plugging the values into the formula, we get:
APY = (1 + (0.085/52))^52 - 1
APY = (1 + 0.0016346)^52 - 1
APY = (1.0016346)^52 - 1
APY = 1.0937795 - 1
APY = 0.0937795
Therefore, the APY is 9.38%.