Find the APY corresponding to the following nominal rate 2 c

Find the APY corresponding to the following nominal rate. 2% compounded quarterly The APY is ____%. (Type an integer or a decimal. Round to the nearest hundredth as needed.)

Solution

APY = Annual Percentage yield

rate = 2% = 0.02

compouned quarterly

n = 4

APY = (1 + r/n)^n - 1

= (1 + 0.02/4)^4 - 1 = 0.020151

APY = 2.0151%