Question: 5 6 . The annual percentage yield ( APY ) of an investment account is a representation of the actual interest rate earned on a

56 .

The annual percentage yield

(

APY

)

of an investment account is a representation of the actual interest rate earned on a compounding account. It is based on a compounding period of one year. Show that the APY of an account that compounds monthly can be found with the formula APY

= (1 + 12) 12 1 .

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