What is the effective annual yield rate of 5.67% compounded quarterly?
Convert to a quarterly basis
There are 4 quarters in a year
Quarterly Interest Rate =
0.0567
4
Quarterly Interest Rate = 0.014175
Set up quarterly compounding
From above, we have n = 4 Yield Rate = (1 + quarterly rate)n - 1 Yield Rate = (1 + 0.014175)4 - 1 Yield Rate = 1.0141754 - 1 Yield Rate = 1.0579170168896 - 1
Yield Rate = 0.057917016889554 Yield Rate Expressed as a percentage = 5.79%
What is the Answer?
Yield Rate = 0.057917016889554 Yield Rate Expressed as a percentage = 5.79%
How does the Effective Annual Yield Rate Calculator work?
Figures out the effective annual yield rate of interest entered by compounding daily, weekly, semi-monthly, monthly, quarterly, semi-annually, and continuously. This calculator has 1 input.
What 3 formulas are used for the Effective Annual Yield Rate Calculator?
Effective time = Interest/Number of Compounding Periods
What 4 concepts are covered in the Effective Annual Yield Rate Calculator?
compound interest
the interest you earn on principal and interest A = (1 + r/n)nt
effective annual yield rate
Yield rate taking compounding periods into effect
interest
payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum, at a particular rate
yield
How much an investment returns in terms of interest rate
Example calculations for the Effective Annual Yield Rate Calculator
