Answer:
The annual percentage yield is of 2.78%.
Step-by-step explanation:
Annual percentage yield of an account:
The annual percentage yield of an account compounded n times during the year with a decimal interest rate of r is given by:
[tex]Y = (1+\frac{r}{n})^n - 1[/tex]
Pays 2.75% compounded quarterly
This means that [tex]r = 0.0275, n = 4[/tex]. So
[tex]Y = (1+\frac{r}{n})^n - 1[/tex]
[tex]Y = (1+\frac{0.0275}{4})^4 - 1[/tex]
[tex]Y = 0.0278[/tex]
0.0278 = 2.78%
The annual percentage yield is of 2.78%.
