Asked by matt
Assume an 18-month CD purchased for $7000 pays an APR of 7% compounded monthly. What is the APY?
(Fill in the blank below and round your answer to 2 decimal places.)
APY = %
Answers
Answered by
Henry
P = Po(1+r)^n.
r = (7%/12)/100% = 0.005833 = Monthly % rate expressed as a decimal.
n = 12Comp/yr. * 1.5yrs. = 18 Compounding periods.
P = 7000(1.005833)^18 = $7737.90.
APY = ((P-Po)/Po)*100 =
r = (7%/12)/100% = 0.005833 = Monthly % rate expressed as a decimal.
n = 12Comp/yr. * 1.5yrs. = 18 Compounding periods.
P = 7000(1.005833)^18 = $7737.90.
APY = ((P-Po)/Po)*100 =
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