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A bank features a savings account that has an annual percentage rate of 2.7 % with interest compounded quarterly. Sophia deposits $3,000 into the account. What is the annual percentage yield (APY) for the savings account? %. Round to the nearest hundredth of a percent

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sqdancefan

Answer:

  2.73%

Step-by-step explanation:

You want the APY of an account earning 2.7% interest compounded quarterly.

APY

The annual percentage yield is found using the formula ...

  APY = (1 +r/n)^n -1

where r is the annual interest rate compounded n times per year.

  APY = (1 +0.027/4)^4 -1 ≈ 0.027274 ≈ 2.73%

The APY of the savings account is about 2.73%.

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