document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1179718>Question 1179718</A>: <I><SPAN STYLE=\"word-break: break-all;\">  A three-year CD can be purchased at a bank for $3000 with an APR of 5.53% that is compounded quarterly. So that you can compare this opportunity to a CD available at some other bank, calculate the APY. (Round your answer to the nearest hundredth 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 #850181 by </B><A HREF=/tutors/aboutme.mpl?userid=CPhill><B>CPhill(1959)</B></A><img src=\"/images/stars/stars-12.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=CPhill><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=CPhill><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=850181\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> Here's how to calculate the Annual Percentage Yield (APY) for the CD:\r<BR>\n" );
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document.write( "**Understanding APR and APY**\r<BR>\n" );
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document.write( "* **APR (Annual Percentage Rate):** The stated annual interest rate.<BR>\n" );
document.write( "* **APY (Annual Percentage Yield):** The actual annual rate of return, taking into account the effect of compounding.\r<BR>\n" );
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document.write( "**Formula**\r<BR>\n" );
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document.write( "The formula to calculate APY is:\r<BR>\n" );
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document.write( "APY = (1 + (APR / n))^n - 1\r<BR>\n" );
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document.write( "Where:\r<BR>\n" );
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document.write( "* APR is the annual percentage rate (as a decimal).<BR>\n" );
document.write( "* n is the number of compounding periods per year.\r<BR>\n" );
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document.write( "**Calculation**\r<BR>\n" );
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document.write( "1.  **Convert APR to decimal:** 5.53% = 0.0553<BR>\n" );
document.write( "2.  **Plug in the values:**<BR>\n" );
document.write( "    * APY = (1 + (0.0553 / 4))^4 - 1<BR>\n" );
document.write( "    * APY = (1 + 0.013825)^4 - 1<BR>\n" );
document.write( "    * APY = (1.013825)^4 - 1<BR>\n" );
document.write( "    * APY ≈ 1.0565 - 1<BR>\n" );
document.write( "    * APY ≈ 0.0565<BR>\n" );
document.write( "3.  **Convert to percentage:** 0.0565 * 100% = 5.65%\r<BR>\n" );
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document.write( "**Answer**\r<BR>\n" );
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document.write( "The APY for the CD is 5.65%.<BR>\n" );
document.write( " </SPAN>\n" );
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