Question

If the APR of a savings account is 5.3% and interest is compounded quarterly,

Answer 1

Answer:

5.41%

Step-by-step explanation:

Let us assume that x amount is invested in a savings account with APR 5.3% and the interest is compounded quarterly.

Then the quarterly percentage rate is $\frac{5.3}{4} =1.325$%.

Therefore, the amount x will become after one year  

$x[1+ \frac{1.325}{100} ]^{4} = 1.0541x$

Therefore, the annual percentage yeild will be $\frac{(1.0541x - x) \times 100}{x}$ % = 5.41%. ( Answer )