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Suppose that you have an investment, call it investment A which is a deposit account that compounds interest on initial deposits at a rate of
Suppose that you have an investment, call it investment "A" which is a deposit account that compounds interest on initial deposits at a rate of 7% per year for one year. You are considering investment B that is stating an annual rate of X% which compounds interest at a rate of (X/12)% per MONTH for one year. What must X be in order to ensure that A and B generate the same Effective Annual Yield? Solve for X, round your answer to 4 decimals, and report your answer in the box below.
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