Question

Marijn's account has an annual interest rate of 3.9% compounded monthly.What is the annual percentage yield for Marijn's account?

Answer 1

Given:

Interest rate = 3.9% compounded monthly.

The annual percentage yield is calculated as,

`\begin{gathered} \text{APY}=(1+(r)/(n))^n-1 \\ \text{APY}=(1+(3.9)/(100*12))^(12)-1 \\ \text{APY}=(1.003325)^(12)-1 \\ \text{APY}=0.0397 \\ \text{APY}=3.97\text{ \%} \end{gathered}`

Answer: annual percentage yield is 3.97 %