An investment has a nominal interest rate of 12% annually,but interest on the investment is compounded monthly.Therefore,the annual percentage yield on the investment is:
A)12%.
B)12.68%.
C)13.89%.
D)12.36%.

Question

Quizplus · Accepted Answer

The annual percentage yield (APY) is calculated using the formula: APY = (1 + r/n)^(n*t) - 1, where r is the nominal rate (0.12), n is the number of compounding periods per year (12), and t is the number of years (1). This results in an APY of approximately 12.68%.

An Investment Has a Nominal Interest Rate of 12% Annually,but