Justin deposits $8,000 in a one-year cd at 3.1% interest, compounded daily. what is justin’s annual percentage yield (apy) to the nearest hundredth of a percent? (hint: find the interest using the compounding formula. then use the simple interest formula to find the rate, as if the interest you found at first were simple interest.)

Justin’s annual percentage yield = 3.15%

Step-by-step explanation:

Justin deposits $8,000 in a one-year CD at 3.1% interest, compounded daily.

WE apply compound interest formula

P is the initial amount deposited= 8000

r is the rate of interest = 3.1% = 0.031

n is the number of periods compounded = 365

t is the number of years = 1

Plug in all the values and find out A

A=8000 * (1.000084931506849315)^365

A= 8251.87

Interest amount = 8251.87 - 8000= $251.87

To find annual percentage yield we use simple interest formula

Interest = P*r*t

251.87 = 8000* r * 1

Divide by 8000 on both sides

r =0.0314838

To find out the percentage we multiply by 100

r =0.0314838 * 100 = 3.14838

Its approximately 3.15%

c

step-by-step explanation: