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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.
 one year ago
 one year 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.
 one year ago
 one year ago

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amistre64Best ResponseYou've already chosen the best response.1
your lacking information for the problem in your post
 one year ago

amistre64Best ResponseYou've already chosen the best response.1
APR 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 \[1+k=(1+\frac rn)^n\] \[k=(1+\frac rn)^n1\]
 one year ago

starrhunterBest ResponseYou've already chosen the best response.0
Yes 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?
 one year ago

amistre64Best ResponseYou've already chosen the best response.1
this 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
 one year ago

amistre64Best ResponseYou've already chosen the best response.1
since 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
 one year ago

starrhunterBest ResponseYou've already chosen the best response.0
I 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.
 one year ago

amistre64Best ResponseYou've already chosen the best response.1
usually, a higher numerical value attracts more investors on a psychological level
 one year ago

amistre64Best ResponseYou've already chosen the best response.1
think of a rate ... think of how many times a year you want to assess that rate ...
 one year ago

starrhunterBest ResponseYou've already chosen the best response.0
okay so. 15.5% compounded monthly
 one year ago

amistre64Best ResponseYou've already chosen the best response.1
then r = 15.5, n=12 and k = (1+.0155/12)^12  1
 one year ago

amistre64Best ResponseYou've already chosen the best response.1
got my decie in the wrong spot :) 0.155/12 that is
 one year ago

amistre64Best ResponseYou've already chosen the best response.1
APR = 15.5 % APY = 16.6449 % according to the workings of my patent pending formulas
 one year ago

starrhunterBest ResponseYou've already chosen the best response.0
Ah okay, this seems to make it more concrete. thank you :)
 one year ago

amistre64Best ResponseYou've already chosen the best response.1
youre welcome; and just to fix a typo ... APY = 16.6499 % these old eyes aint what they used ta be
 one year ago

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