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You've just opened up a new savings account at the local credit union. You deposited $500 into the account. If you leave your $500 in the account for one year, the interest rate (APR) is 2% compounding semiannually, what is the APY?

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jojocookie092

Answer:

I believe the APY would be $520 for the rounded version and $520.20 for the not rounded

(not completely certain since i didnt fully understand)

Explanation:

using the formula for calculating compounding semi annualy

A = P(1 + r)t

A= 500(1+0.02)2 (i put 2 instead of one year because its semi annually so twice)

A= 500(1.02)2

A= 500x1.04=$520(rounded)

A=500x1.0404= $520.20(not rounded)

Please correct me if I understood your question wrong

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