Asked by Adam

A bank advertises a savings account that earns 3% APR compounded daily.

What is the "n" become for the compound interest formula?
What is the APY rate for this loan? Round answer to nearest 100th

Answers

Answered by Scott
there are 365 compounding periods per year

[1 + (.03 / 365)]^365 = 1 + APY
Answered by Adam
So is this the formula or the answer?
Answered by Henry
P = Po(1+r)^n.

r = 0.03/365 = 8.22*10^-5/day = Daily % rate.

n = 365 Compounding/yr.

Let Po = $1.00 for this calculation.
P = 1(1.00008.22)^365 = 1.03045.

APY = 1.03045 - 1 = 0.03045 = 3.05%.

Answered by Adam
okay so when i put P= 1(1.00008.22)^365 in calculator it comes up as an error
Answered by Scott
the built in Windows calculator (in scientific mode) works pretty well
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