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Vikentia [17]
3 years ago
12

Savings account A and savings account B both offer APRs of 2%, but savings account A compounds interest quarterly, while savings

account B compounds interest monthly. Which savings account offers the higher APY?
Business
2 answers:
Dimas [21]3 years ago
8 0

Savings account B offers a higher APY because monthly compounding gives a better return than quarterly compounding.

Savings account A: Quarterly compounding: APY = (1+0.02/4)^4 -1 = 2.015%

Savings account B : Monthly compounding: APY = (1+0.02/12)^12 -1 = 2.018%

As we can see, Savings account B with monthly compounding produces a slightly higher APY than A and hence is better than A

FinnZ [79.3K]3 years ago
8 0

Answer:

The answer should be, Savings account B, because it has more compounding periods per year. (Apex)

Explanation:

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If the Fed buys U.S. government securities from banks, the federal funds rate falls and banks' reserves increase.

<h3>Fed's Monetary Policy</h3>
  • Price stability and full employment, the Federal Reserve's two legally mandated goals, are necessary to ensure a healthy and expanding economy in the United States.
  • In the past, the Fed has achieved this via modifying reserve requirements, conducting open market operations (OMO), and influencing short-term interest rates.
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