A California bank, Berkeley Savings and Loan, advertised the following information: 7.55% APR and effective annual yield
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A California bank, Berkeley Savings and Loan, advertised the following information: 7.55% APR and effective annual yield 7.842%. No mention is made of the interest period in the advertisement. Can you figure out the compounding scheme used by the bank?
CompoundingCompounding is the process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time. This growth, calculated using exponential functions, occurs because the investment will...
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