Question

If the APR of a savings account is 6.8% and interest is compounded semiannually, what is the approximate APY of the account?







A.

6.92%








B.

6%








C.

1.07%








D.

10.74%

Answer 1

@Algorithmic help please

Answer 2

Hello,

Since you know the APR you can use it to calculate the APY, using the formula below.

\[APY = (1 + APR \div n)^{n} – 1\]
Note; n = the number of compounding periods.

First convert the APR percentage to a decimal.
6.8/100 = 0.068

Input that into the formula:
\[(1 + 0.068 \div 12)^{12} – 1\]

Convert you answer from decimal form to percentage.

Peace.

Answer 3

6.92 @Algorithmic