This question: 2 point(s) possible
$K$
An account has a rate of $2.2 \%$. Find the effective annual yield if the interest is compounded daily. (Assume 365 days in a year.)
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The effective annual yield is $\square \%$.
(Round to the nearest hundredth as needed.)

Answer

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Answer

The effective annual yield is $ \boxed{2.22\%} $

Steps

Step 1 ：Use the compound interest formula $ A = P(1 + \frac{r}{n})^{nt} $ to find the effective annual yield with daily compounding

Step 2 ：Set $ P = 1 $ and $ t = 1 $ year to simplify the calculation

Step 3 ：Calculate the effective annual yield using $ (1 + \frac{r}{n})^{n} - 1 $, where $ r = 0.022 $ and $ n = 365 $

Step 4 ：Round the effective annual yield to the nearest hundredth

Step 5 ：The effective annual yield is $ \boxed{2.22\%} $