A passbook savings account has a rate of 8%. Find the effective annual yield, rounded to thenearest tenth of a percent, if the interest is compounded 1000 times per year.Click the icon to view some finance formulas.The effective annual yield is %.(Round to the nearest tenth as needed.) In the provided formulas, A is the balance in the account after t years, P is theprincipal investment, r is the annual interest rate in decimal form, n is the numberof compounding periods per year, and Y is the investment's effective annual yieldin decimal form.A=P[1+1)ntP=A1+-ntA = PertnrY² = (₁ + = -) ₁ - ₁11

Y = (1+(r/n))n - 1 Where Y = Effective Annual Yield (TO be calculated) r = Annual rate of interest…

Answered: A passbook savings account has a rate…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A passbook savings account has a rate of 8%. Find the effective annual yield, rounded to the nearest tenth of a percent, if the interest is compounded 1000 times per year. Click the icon to view some finance formulas. The effective annual yield is %. (Round to the nearest tenth as needed.)
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Suppose that you can make an annual profit of $600 on an investment of $4000. Suppose you borrow the investment amount at an annual interest rate of 8%. Your updated expectation of inflation is 6%. Then your gross real returns (before loan payment) is _____ and your net real returns (after loan payment) is ______.

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A passbook savings account has a rate of 8%. Find the effective annual yield, rounded to the nearest tenth of a percent, if the interest is compounded 1000 times per year. iClick the icon to view some finance formulas. The effective annual yield is %. (Round to the nearest tenth as needed.)