SOLUTION: How do you find the effective annual yield of an account paying 4.5% compounded monthly?

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Question 680386: How do you find the effective annual yield of an account paying 4.5% compounded monthly?
Answer by stanbon(75887) About Me  (Show Source):
You can put this solution on YOUR website!
find the effective annual yield of an account paying 4.5% compounded monthly?
Since A(t) = P(1+(r/n))^(nt)
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A(1) = P(1+(0.045/12))^(12*1)
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Interest rate + 1 = (1+(0.045/12))^12 = 1.04594...
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Effective rate = 4.59%
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Cheers,
Stan H.
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