College Algebra 7th Edition

Published by Brooks Cole
ISBN 10: 1305115546
ISBN 13: 978-1-30511-554-5

Chapter 4, Exponential and Logarithmic Functions - Chapter 4 Review - Exercises - Page 426: 95

Answer

$4.3\%$.

Work Step by Step

In $A(t)=P(1+\frac{r}{n})^{nt}$ for compound interest, $P,r,n,t$ respectively stand for the principal, interest rate per year, the number of times the interest is compounded per year and the number of years. $A(t)$ is the amount after $t=1$ year. So if we invest $P$ at an interest rate of $r=0.0425$ compounded daily ($n=365$), the amount is: $A=P(1+\frac{0.0425}{365})^{365(1)}\approx1.043$ Thus the annual percentage yield is $4.3\%$.
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