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Island Bank is advertising a special 1.55% APR for long term CDs. Manny takes out a one-year CD for $40,000. The interest is compounded daily. Find the annual percentage yield for Manny's account to the nearest hundredth of a percent. Fill in the blank 1

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Answer: 1.55%

Step-by-step explanation:

p = Principal = $40000

r = Interest rate = 1.55% = 0.0155

n = Number of periods = 365

APY = [1 + (r/n)^n - 1]

= [1 + (0.0155/365)^365 - 1]

= [1 + 0.000042)^365 - 1]

= [1.000042]^365 - 1

= 1.015448 - 1

= 1.55%

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