What is your annual percentage yield if you get a rate of 8% compounded weekly?

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What is your annual percentage yield if you get a rate of 8% compounded weekly?

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Answer 1 · 2018-07-26T14:53:04

Annual percentage yield is $8.322 %$ $8.322%$ .

Explanation:

In one year an amount $P$ $P$ grows to $P {(1 + \frac{r}{n \times 100})}^{n}$ $P(1+r/(nxx100))^n$ , if compounded at $n$ $n$ equal intervals in the year.

Hence as rate of $8 %$ $8%$ is compounded every week i.e. at $52$ $52$ equal intervals, the amount of $$ 100$ $$100$ becomes

$100 \times {(1 + \frac{8}{5200})}^{52}$ $100xx(1+8/5200)^52$

= $100 \times {(1.0015385)}^{52}$ $100xx(1.0015385)^52$

= $100 \times 1.08322$ $100xx1.08322$

= $108.322$ $108.322$

Hence annual percentage yield is $8.322 %$ $8.322%$ .

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What is your annual percentage yield if you get a rate of 8% compounded weekly?

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