Tutorial Exercise Maria Invests $3,600, at 6% interest, compounded quarterly for one year. Use Table 11-1 to calculate the annual percentage yield (APY) for her investment (as a %). Note: "Annual percentage yield" is also known as "effective interest rate." (Round your answer to two decimal places.) Step 1 The annual percentage yield, APY, reflects the real rate of return on an investment. It is calculated by dividing the total compound interest earned in 1 year by the principal. Recall that the compound interest is the total amount of interest earned on an investment. Before finding the compound interest, we must first find the final value of the investment after all the compounding periods. One way to find the value after all the compounding periods is to use a compound interest table. To use the compound interest table, we must know the interest rate per period and the number of compounding periods. The interest rate per period is calculated using the nominal, or annual, rate and the number of periods per year as follows. interest rate per period w nominal rate periods per year The rate was given to be 6%. Interest is compounded quarterly, or 4 times per year. Find the interest rate per period. interest rate per period w nominal rate periods per year The total number of compounding periods will be the number of years multiplied by the number of compounding periods per year. The investment accrues interest compounded quarterly, so there are 4 compounding periods per year. The investment is for 1 year. Find the total number of compounding periods. total number of compounding periods number of years x number of compounding periods per year 1x