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Economics Asked by a SnapAndSolve user · 15 minutes ago

of 20 Which method is used to calculate annual percentage yield (APY)?

Question 15 of 20
Which method is used to calculate annual percentage yield (APY)?
A. Multiply the initial deposit by the nominal interest rate.
B. Multiply the amount in the account by the initial deposit.
C. Multiply the amount in the account by the nominal interest rate.
D. Multiply the nominal interest rate by the interest earned.

Answer

None of the listed options is correct. APY accounts for compounding and is calculated as APY = [(1 + r/n)n − 1] × 100%, where r is the nominal annual interest rate expressed as a decimal and n is the number of compounding periods per year. Option A calculates simple annual interest, not APY.

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