Northwest Bank pays a quoted annual (nominal) interest rate of 4.75%. However, - 3949

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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. 4.75% 

B. 5.02% 

C. 4.86% 

D. 3.61% 

 
Solution Description

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