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    APY 100 (1 +interest Earned Average Account Balance) - 1

    Uploaded by

    Hussain
    The document contains 3 questions that require using the annual percentage yield (APY) formula to calculate interest earned on savings accounts based on given account balances and interest amounts. The first question provides an example calculation. The second question asks the reader to calculate the APY earned on Monica's savings account based on her monthly balances and $10.75 interest earned. The third question asks the reader to calculate the total interest earned for a business CD with a 3.5% APY and varying balances over the year.

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    APY 100 (1 +interest Earned Average Account Balance) - 1

    Uploaded by

    Hussain
    62 views1 page
    The document contains 3 questions that require using the annual percentage yield (APY) formula to calculate interest earned on savings accounts based on given account balances and interest amounts. The first question provides an example calculation. The second question asks the reader to calculate the APY earned on Monica's savings account based on her monthly balances and $10.75 interest earned. The third question asks the reader to calculate the total interest earned for a business CD with a 3.5% APY and varying balances over the year.

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    50_8450_494180 (4)

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    The document contains 3 questions that require using the annual percentage yield (APY) formula to calculate interest earned on savings accounts based on given account balances and interest amounts. The first question provides an example calculation. The second question asks the reader to calculate the APY earned on Monica's savings account based on her monthly balances and $10.75 interest earned. The third question asks the reader to calculate the total interest earned for a business CD with a 3.5% APY and varying balances over the year.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    62 views1 page

    APY 100 (1 +interest Earned Average Account Balance) - 1

    Uploaded by

    Hussain
    The document contains 3 questions that require using the annual percentage yield (APY) formula to calculate interest earned on savings accounts based on given account balances and interest amounts. The first question provides an example calculation. The second question asks the reader to calculate the APY earned on Monica's savings account based on her monthly balances and $10.75 interest earned. The third question asks the reader to calculate the total interest earned for a business CD with a 3.5% APY and varying balances over the year.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Q1. Use the APY formula required by the Truth in Savings Act for the following calculation.

    Suppose that a customer holds a savings deposit in a savings bank for a year. The balance in the
    account stood at $2,000 for 180 days and $100 for the remaining days in the year. If the Savings
    bank paid this depositor $8.50 in interest earnings for the year, what APY did this customer
    receive?

    The correct formula is:

    [ ]
    365
    Interest Earned Days in Period
    APY = 100 ( 1 + ) -1
    Average Account Balance

    Q2. Monica Lane maintains a savings deposit with Monarch Credit Union. This past year
    Monica received $10.75 in interest earnings from her savings account. Her savings deposit had
    the following average balance each month:

    January $400 July $350


    February 250 August 425
    March 300 September 550
    April 150 October 600
    May 225 November 625
    June 300 December 300

    What was the annual percentage yield (APY) earned on Monica’s savings account?

    Q3. The National Bank of Mayville quotes an APY of 3.5 percent on a one-year money market
    CD sold to one of the small businesses in town. The firm posted a balance of $2,500 for the first
    90 days of the year, $3,000 over the next 180 days, and $4,500 for the remainder of the year.
    How much in total interest earnings did this small business customer receive for the year?

    Using the APY formula:

    APY = 100
    [ (1+
    Interest Earnings 365/365
    Average Balance
    ) −1
    ]

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