Justin deposits $8,000 in a one-year CD at 3.1% interest, compounded daily. What is Justin's annual percentage yield (APY) to the nearest hundredth of a percent? (Hint: Find the interest using the compounding formula. Then use the simple interest formula to find the rate, as if the interest you found at first were simple interest.)

Question

Mathematics

Catalina Holland

5 February, 21:34

Justin deposits $8,000 in a one-year CD at 3.1% interest, compounded daily. What is Justin's annual percentage yield (APY) to the nearest hundredth of a percent? (Hint: Find the interest using the compounding formula. Then use the simple interest formula to find the rate, as if the interest you found at first were simple interest.)

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Estrella Bond · Answer 1

Total = Princ * (1 + rate/365) ^365*1 year

Total = 8,000 * (1 +.031/365) ^365

Total = 8,000 * (1.000084931506849315) ^365

Total = 8,000 * 1.0314841461

Total = 8,251.87

rate = (1 +.031/365) ^365 = 1.0314841461 =

3.14841461