Northwest Bank pays a quoted annual (nominal) interest rate of 4.75%. - 3691

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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

15) 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)?