Northwest Bank pays a quoted annual (nominal) interest rate of 4.75%. - 422

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Northwest Bank pays a quoted annual (nominal) interest rate of 4.75%. However, it pays interest (compouned) daily using a 365-day year. What is the effective annual rate of return (APY)? 

A.5.02%

B.3.61%

C.4.75%

D.4.86%

Solution Description

Northwest Bank pays a quoted annual (nominal) interest rate of 4.75%.