Blade, Jace, and Ambrynn all invest the same amount in different accounts. Blade invests in an account with an APR of 7.25% compounded continuously. Jace invests in an account with an APR of 7.35% compounded annually. Ambrynn invests in an account with an APR 7.30% compounded quarterly. Find the APY for each account. Show work. Round to two decimal places. (6.1) Blade's APY (6.2) Jace's APY (6.3) Ambrynn's APY Answer: Answer: Answer:
Blade, Jace, and Ambrynn all invest the same amount in different accounts. Blade invests in an account with an APR of 7.25% compounded continuously. Jace invests in an account with an APR of 7.35% compounded annually. Ambrynn invests in an account with an APR 7.30% compounded quarterly. Find the APY for each account. Show work. Round to two decimal places. (6.1) Blade's APY (6.2) Jace's APY (6.3) Ambrynn's APY Answer: Answer: Answer:
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![### Problem Statement
Blade, Jace, and Ambrynn all invest the same amount in different accounts. Blade invests in an account with an APR of 7.25% compounded continuously. Jace invests in an account with an APR of 7.35% compounded annually. Ambrynn invests in an account with an APR 7.30% compounded quarterly. Find the APY for each account. Show work. Round to two decimal places.
### Solution
**6.1) Blade’s APY**
Blade’s account is compounded continuously. To find the APY for continuous compounding, we use the formula:
\[ APY = e^{r} - 1 \]
where \( r \) is the annual interest rate (APR) expressed as a decimal.
**Calculation:**
\[ r = 0.0725 \]
\[ APY = e^{0.0725} - 1 \]
**Answer:**
\[ \text{Answer:} \]
**6.2) Jace’s APY**
Jace’s account is compounded annually. For annual compounding, the APY is the same as the APR.
**Calculation:**
\[ APR = 7.35\% \]
**Answer:**
\[ \text{Answer: } 7.35\% \]
**6.3) Ambrynn’s APY**
Ambrynn’s account is compounded quarterly. To find the APY, we use the formula:
\[ APY = \left(1 + \frac{r}{n}\right)^n - 1 \]
where \( r \) is the annual interest rate and \( n \) is the number of compounding periods per year.
**Calculation:**
\[ r = 0.0730 \]
\[ n = 4 \]
\[ APY = \left(1 + \frac{0.0730}{4}\right)^{4} - 1 \]
**Answer:**
\[ \text{Answer:} \]
### Diagram Explanation
There are no diagrams or graphs in this problem. The problem consists of a textual description of investment scenarios and blank spaces for calculating and writing the answers. The blank spaces are provided for showing your work and final answers for each of the three scenarios (Blade, Jace, and Ambrynn).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff24ce67d-5c13-49ab-8f30-49b92ca3e30b%2F21d08d80-f63e-4137-b88f-96a8f87db26c%2F2v5alrq_processed.png&w=3840&q=75)
Transcribed Image Text:### Problem Statement
Blade, Jace, and Ambrynn all invest the same amount in different accounts. Blade invests in an account with an APR of 7.25% compounded continuously. Jace invests in an account with an APR of 7.35% compounded annually. Ambrynn invests in an account with an APR 7.30% compounded quarterly. Find the APY for each account. Show work. Round to two decimal places.
### Solution
**6.1) Blade’s APY**
Blade’s account is compounded continuously. To find the APY for continuous compounding, we use the formula:
\[ APY = e^{r} - 1 \]
where \( r \) is the annual interest rate (APR) expressed as a decimal.
**Calculation:**
\[ r = 0.0725 \]
\[ APY = e^{0.0725} - 1 \]
**Answer:**
\[ \text{Answer:} \]
**6.2) Jace’s APY**
Jace’s account is compounded annually. For annual compounding, the APY is the same as the APR.
**Calculation:**
\[ APR = 7.35\% \]
**Answer:**
\[ \text{Answer: } 7.35\% \]
**6.3) Ambrynn’s APY**
Ambrynn’s account is compounded quarterly. To find the APY, we use the formula:
\[ APY = \left(1 + \frac{r}{n}\right)^n - 1 \]
where \( r \) is the annual interest rate and \( n \) is the number of compounding periods per year.
**Calculation:**
\[ r = 0.0730 \]
\[ n = 4 \]
\[ APY = \left(1 + \frac{0.0730}{4}\right)^{4} - 1 \]
**Answer:**
\[ \text{Answer:} \]
### Diagram Explanation
There are no diagrams or graphs in this problem. The problem consists of a textual description of investment scenarios and blank spaces for calculating and writing the answers. The blank spaces are provided for showing your work and final answers for each of the three scenarios (Blade, Jace, and Ambrynn).
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