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Secure https://www.mathxl.com/Student/Player Test.aspx?testld-175949183&centerwin-yes; MGF1107 SURVEY OF MATHONLIN E EDONY PRINCIVIL 588337 uiz: Section 7.1- 7.3 Quiz his Question: 1 pt 50f 14 (2 complete) Suppose a savings and loan pays a nominal rate of 3 2% on savings deposits Find the effective annual yield if interest is compounded daily Assume that the year is not a leap year The effective annual yield is[ (Type an integer or a decimal rounded to the nearest thousandth as needed) nter your answer in the ansver box Type

Explanation / Answer

Effective annual rate formula is

EAR = ({1+(i/n)}^n)-1

Here "i" is given nominal rate of interest

"n" is compounding periods

as per given data

i=3.2%=3.2/100=0.032

n=365 because compounded daily

EAR = ({1+(0.032/365)}^365)-1

=> 0.03251

=> 3.251%

Therefore Effective annula rate is 3.251%.

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