Assume an 18-month CD purchased for $7000 pays an APR of 3% compounded monthly. What is the APY?

Answer 1

I will assume APY means the effective annual interest rate.

let that rate be i

(1+i)^1 = (1 + .03/12)^12
1+i = 1.030416

i = .030416 = 3.0416%