SOLUTION: A bank features a savings account that has an annual percentage rate of 5.8 % with interest compounded semi-annually. what is the APY? Round to the nearest hundredth of a perc

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Question 1157592: A bank features a savings account that has an annual percentage rate of
5.8
% with interest compounded semi-annually. what is the APY? Round to the nearest hundredth of a percent
Answer by Shin123(626) About Me  (Show Source):
You can put this solution on YOUR website!
The formula for calculating APY is APY=%281%2Br%2Fn%29%5En-1, with r being the interest rate and n being the number of times the money is compounded per year. Plugging in 0.058 for r and 2 for n gives %281%2B0.058%2F2%29%5E2-1=%281.029%29%5E2-1=0.058841. The APY is 5.88%.