Frequency of Compounding and APY We ve seen that the

Last updated: 2/8/2023

Frequency of Compounding and APY We ve seen that the frequency of compounding can have a significant effect on the overall interest accumulated Let s take a deeper dive by calculating the APY of the same situation using different compounding periods Scenario Alonso bought a 3 000 gaming computer using his credit card A special financing offer allows him to make no payments for 2 years but interest will still accrue at a rate of 16 92 APR and be added to the bill if he doesn t pay full balance in 2 years 1 Use the compound interest formula to calculate Alonso s balance after 2 years using each compounding period assuming he makes no payments Write your answer in the Account Balance column Compounding Period nobirt over betwo Yearly Semiannually Monthly ibnupo Daily Account Balance after 2 years 1 2 A 3000 1 A 4 101 09 0 1692 virbnom bebras A baaltavi