Ralph Kramer invested $11,000 in a certificate of deposit for 1 year. The certificate earns interest at an annual rate of 6.75%

compounded daily. The amount per $1.00 is 1.069824. What is the annual percentage yield?

7 %

Explanation:

The annual percentage yield will be the percentage gain at the end of the year.

The initial investment is $11, 000; the yield will be the balance at the end of the year minus the initial investment.

i. e., yield = balance at the end of the year - Initial investment

Percentage yield = Yield / initial investments x 100

balance at the end of the year will:

the applicable formula for the future is the compound interest formula.

FV = PV * (1+r) n

Where

FV = future value

PV = $11,000

r = 6,75 per year 0r 0.000185 per day

n - i year or 365 days

Balance at the end of the year

FV = 11, 000 X (1+0,000185) 365

FV = 11,000 X 1.069834

FV = 11, 768.35

the yield will be

=balance at the end of the year - initial investment

=$11,768.35 - $11,000

=$768.35

Percentage yield will be

yield / initial investment x 100

=768.35 / 11,000 x 100

=6.985%

=7%