Answer
$3.2474\%$
Work Step by Step
Given $r=0.032, n=12$, with the formula of compounding interests for 1 year we have
$A(1)=P(1+\frac{0.032}{12})^{12\times1}=1.03247P$ where $P$ is the initial investment.
Thus, the APY can be calculated as $APY=\frac{A(1)-P}{P}=3.2474\%$
