Part 1: Explain which companies would advertise APR over APY and describe how this would help them attract customers. (4 points)

Part 2: Create a unique APR (state how often the rate is compounded) and calculate the corresponding APY. Use a comparison of the two rates to verify your answer to part 1. (4 points)

PLEASE HELP

Question

Part 1: Explain which companies would advertise APR over APY and describe how this would help them attract customers. (4 points)

Part 2: Create a unique APR (state how often the rate is compounded) and calculate the corresponding APY. Use a comparison of the two rates to verify your answer to part 1. (4 points) 

PLEASE HELP

tkhunny · Answer

APR is meaningless without a specific and complete description of compounding methodology.

APY includes all considerations and can be compared, one against the other.

anonymous · Answer

thank you!! any idea about part 2 ? @tkhunny

tkhunny · Answer

3% APR Compounded Monthly  $(1+ 0.03/12)^{12} - 1 = 0.030416$ APY
3.02% APR Compounded Annually  3.02% APY