Problema Solution
What is the APY for an account paying 4% compounded semi-annually?
Answer provided by our tutors
P = principle
n = number of years
P(1 + .04/2)^2n
For one year: P(1 + .04/2)^(2*1) = P(1 + .02)^2 = 1.0104P
=> 1.0104 - 1 = 0.0404
The APY is 4.04%.