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What interest rate, compounded quarterly, results in an annual percentage yield (APY) of 4 % ? Enter your answer as a percentage rounded to two decimal places and omit the percent sign ( 6.25 % should be input as 6.25 .)



Answer :

Answer:

3.92%

Step-by-step explanation:

To find the interest rate compounded quarterly that results in an APY of 4%, we can use the formula for APY:

APY = (1 + r/n)^n - 1

where r is the interest rate and n is the number of compounding periods per year (quarterly in this case).

Plugging in the values:

4% = (1 + r/4)^4 - 1

Solving for r, we find that the interest rate should be approximately 3.92% when compounded quarterly.

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