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.

Answer 1

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%.