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starrhunter
 2 years ago
help please?
Part 1: Explain which companies would advertise APY over APR and describe how this would help them attract customers.
Part 2: Create a unique APR (state how often the rate is compounded) and calculate the corresponding APY. Use a comparison of the two rates to verify your answer to part 1.
starrhunter
 2 years ago
help please? Part 1: Explain which companies would advertise APY over APR and describe how this would help them attract customers. Part 2: Create a unique APR (state how often the rate is compounded) and calculate the corresponding APY. Use a comparison of the two rates to verify your answer to part 1.

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amistre64
 2 years ago
Best ResponseYou've already chosen the best response.1your lacking information for the problem in your post

amistre64
 2 years ago
Best ResponseYou've already chosen the best response.1APR of $1, compounded is:\[(1+\frac rn)^n\] APY is the rate it would have been if it had been stated at a compounding of 1 year:\[(1+k)\]where k is the APY \[1+k=(1+\frac rn)^n\] \[k=(1+\frac rn)^n1\]

starrhunter
 2 years ago
Best ResponseYou've already chosen the best response.0Yes it is a bit vague isn't it? Would this be the answer to my question or a formula to plug my own numbers into?

amistre64
 2 years ago
Best ResponseYou've already chosen the best response.1this is a general formula to aid you along the way let r be the rate that is compounded, let n be the number of times a year it gets assessed, and then k (or the APY) is just a function r and n as stated

amistre64
 2 years ago
Best ResponseYou've already chosen the best response.1since the APR and the APY give the same "values" at the end of the year, the strategy lies in how people relate the value of a rate to their investments

starrhunter
 2 years ago
Best ResponseYou've already chosen the best response.0I am supposed to create my own scenaario here. But I can't come up with a rational one to really protray the relationship between apr and apy.

amistre64
 2 years ago
Best ResponseYou've already chosen the best response.1usually, a higher numerical value attracts more investors on a psychological level

amistre64
 2 years ago
Best ResponseYou've already chosen the best response.1think of a rate ... think of how many times a year you want to assess that rate ...

starrhunter
 2 years ago
Best ResponseYou've already chosen the best response.0okay so. 15.5% compounded monthly

amistre64
 2 years ago
Best ResponseYou've already chosen the best response.1then r = 15.5, n=12 and k = (1+.0155/12)^12  1

amistre64
 2 years ago
Best ResponseYou've already chosen the best response.1got my decie in the wrong spot :) 0.155/12 that is

amistre64
 2 years ago
Best ResponseYou've already chosen the best response.1APR = 15.5 % APY = 16.6449 % according to the workings of my patent pending formulas

starrhunter
 2 years ago
Best ResponseYou've already chosen the best response.0Ah okay, this seems to make it more concrete. thank you :)

amistre64
 2 years ago
Best ResponseYou've already chosen the best response.1youre welcome; and just to fix a typo ... APY = 16.6499 % these old eyes aint what they used ta be

starrhunter
 2 years ago
Best ResponseYou've already chosen the best response.0Ahaha, I was checking that on my calculator and I noticed that too, no worries. It happens to the best of us!
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