could someone show me the formula at a interest rate of 12% compounded quarterly looking to get the (apy)

Question

jim_thompson5910 · Answer

Use the formula

APY = (1+r/n)^n - 1

where 

APY = annual percentage yield
r = interest rate
n = compounding frequency

In this case

APY = unknown
r = 0.12
n = 4

anonymous · Answer

thank you

jim_thompson5910 · Answer

np

anonymous · Answer

came up with answer 624 but is not giving me the apy

anonymous · Answer

did i miss something?

jim_thompson5910 · Answer

APY = (1+r/n)^n - 1

APY = (1+0.12/4)^4 - 1

APY = (1+0.03)^4 - 1

APY = (1.03)^4 - 1

APY = 1.12550881 - 1

APY = 0.12550881

anonymous · Answer

lol

jim_thompson5910 · Answer

So if the interest rate is 12%, compounded quarterly, then the APY is roughly 12.550881%

jim_thompson5910 · Answer

so it's close to the interest rate (but slightly higher)

anonymous · Answer

thats even more complicated but nicely explained like that

anonymous · Answer

i like that

jim_thompson5910 · Answer

you can read more about APY (aka effective interest rate) here http://en.wikipedia.org/wiki/Effective_interest_rate

anonymous · Answer

i was trying to get to that apy
 and thx for link
now trying it thx jim

jim_thompson5910 · Answer

yw

anonymous · Answer

now i can try my new scientific calculator lol using the above

jim_thompson5910 · Answer

hopefully you'll get the same

anonymous · Answer

hope so

anonymous · Answer

yes i did thx

jim_thompson5910 · Answer

ok great, yw

anonymous · Answer

you made that look easy, now that i have studied your variations i completly understand not bad for a 50 + student lol