Question

What is the annual yield of 15%

compounded monthly? (round to 4
decimal places and write your answer
as a %)

Answer 1

`~~~~~~ \textit{Annual Percent Yield Formula} \\\\ ~~~~~~~~~~~~ \left(1+(r)/(n)\right)^(n)-1 ~\hfill \begin{cases} r=rate\to 15\%\to (15)/(100)\dotfill &0.15\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{monthly, thus twelve} \end{array}\dotfill &12 \end{cases} \\\\\\ \left(1+(0.15)/(12)\right)^(12)-1\implies 1.0125^(12)-1\approx 0.1608\hspace{5em}\stackrel{ 0.1608 ~~ * ~~ 100 }{\approx \text{\LARGE 16.08\%}}`