calculate the apy for an account that pays 1.5%: 1. compounded daily 2. compounded monthly 3. compounded…

Explanation:

Step1: Recall APY formula

$APY=(1 + \frac{r}{n})^{n}-1$, where $r$ is the annual - interest rate (in decimal form) and $n$ is the number of compounding periods per year.

Step2: Compounded daily

$r = 0.015$, $n = 365$. Then $APY=(1+\frac{0.015}{365})^{365}-1\approx 1.015113 - 1=0.015113\approx 1.5113%$.

Step3: Compounded monthly

$r = 0.015$, $n = 12$. Then $APY=(1+\frac{0.015}{12})^{12}-1\approx1.015095 - 1 = 0.015095\approx 1.5095%$.

Step4: Compounded annually

$r = 0.015$, $n = 1$. Then $APY=(1+\frac{0.015}{1})^{1}-1=1.015 - 1=0.015 = 1.5%$.

Answer:

1. Approximately $1.5113%$
2. Approximately $1.5095%$
3. $1.5%$