Question

12-7.    Lucy Lane maintains a savings deposit with Monarch Credit Union. This past year Lucy received...

12-7.    Lucy Lane maintains a savings deposit with Monarch Credit Union. This past year Lucy received $10.75 in interest earnings from her savings account. Her savings deposit had the following average balance each month: (Show Steps to receive answer. )

January

$450

July

$450

February

350

August

425

March

300

September

550

April

550

October

600

May

225

November

625

June

400

December

500

What was the annual percentage yield (APY) earned on Lucy’s savings account?

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Answer #1

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Answer:

Lucy account had an average balance this year of:

[$450 x 31 days + $350 x 28 days + $300 x 31 days + $550 x 30 days+ $225 x 31 days + $400 x 30 days + $450 x 31 days + $425 x 31 days +$550 x 30 days + $600 x 31 days + $625 x 30 days + $500 x 31 days]/ 365 days

= $452.0548

Then the APY is given by

=100*((1+10.75/452.0548)^(365/365)-1) = 2.378%

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