Can anyone solve this?

A passbook savings account pays a nominal rate of 7% on savings deposits. Find the effective annual yield if the interest is compounded 1000 times per year.





The effective annual yield is %


(Type an integer or decimal rounded to the nearest tenth as needed)|||The compound interest formula is A = P(1 + r/n)^(n*t)


where


A = future amount


P = present amount


r = interest rate (as a decimal)


n = number of compounding periods per year





So, A and P aren't needed here.


r = .07, n = 1000, t = 1


So, we get (1+.07/1000)^1000 = 1.0725.


The effective annual yield is 7.25% (to the nearest tenth 7.3%)


|||(1 + .07/1000)^1000 - 1 = .0725. or 7.3%|||A = P(0)(1 + r/n)^(nt)





where P(0) is the initial deposit


r is the annual interest rate as a decimal


n is the numer of compounding periods / year


t is the number of years





for your problem, A = P(0) (1 + .07/1000)^(1000*1)


A = P(0)(1.00007)^1000 = P(0)(1.0725)





so after one year, your investment will be worth 7.25% the original investment, which is the effective yield of the account:





effective interest is 7.25% (7.3% rounded to the nearest tenth)