Question

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

Answer 1

the correct answer is 6.92%

Answer 2

The answer is 6.92%

Step-by-step explanation:

From the question given let us recall the values.

The APR of as savings account is = 6.8% and the interest is compounded semiannually.

Then,

APR = (1 + 0.68/12)¹² - 1

APR = (1.68/12)¹² - 1 =0.0692

Therefore the approximate apy of the account is,

APR = 6.92%