What is the APY for 5.3% compounded quarterly?
A) 5.3%
B) 5.4%
C) 5.5%
D) 5.6%

Question

Quizplus · Accepted Answer

The APY (Annual Percentage Yield) can be calculated using the formula APY = (1 + r/n)^(n*1) - 1, where r is the annual interest rate (as a decimal), and n is the number of compounding periods per year. For 5.3% compounded quarterly, r = 0.053 and n = 4. Plugging these values into the formula gives APY = (1 + 0.053/4)^(4*1) - 1 ≈ 0.054, or 5.4%.

What Is the APY for 5.3% Compounded Quarterly