there are 365 compounding periods per year
[1 + (.03 / 365)]^365 = 1 + APY
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
5 answers
So is this the formula or the answer?
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%.
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%.
okay so when i put P= 1(1.00008.22)^365 in calculator it comes up as an error
the built in Windows calculator (in scientific mode) works pretty well