Northwest Bank pays a quoted annual (nominal) interest rate of 4.75%. - 3739

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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. 4.75%

C. 4.86%

D. 3.61% 

Solution Description

Northwest Bank pays a quoted annual (nominal) interest ra