document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1027723>Question 1027723</A>: <I><SPAN STYLE=\"word-break: break-all;\"> US banks advertises an APR of 2.25% compounded weekly. what would be the APY be rounded to the nearest hundred of a percent?  </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #642938 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=642938\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> 2.25% = .0225\r<BR>\n" );
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document.write( ".0225/52 = .0004326932077\r<BR>\n" );
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document.write( "add 1 to that to get 1.0004326932077\r<BR>\n" );
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document.write( "1.0004326932077^52 = 1.0227500571\r<BR>\n" );
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document.write( "subtract 1 from that and you get .0227500571 = 2.27500571%\r<BR>\n" );
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document.write( "the difference is roughly 2.25% versus 2.275%\r<BR>\n" );
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document.write( "you take the nominal annual interest rate and you divide it by the number of compounding periods per year.\r<BR>\n" );
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document.write( "you then add 1 to that and you raise it to the power of the number of compounding periods per year.\r<BR>\n" );
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document.write( "you then subtract 1 from that and you get the effective interest rate per year.\r<BR>\n" );
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document.write( "in this particular case, the number of compounding periods per year was 52 because there are 52 weeks in one year.\r<BR>\n" );
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document.write( "apr is the nominal interest rate per year.<BR>\n" );
document.write( "apy is the effective interest rate per year.\r<BR>\n" );
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document.write( " </SPAN>\n" );
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