Savings account A and savings account B both offer APRs of 7%, but savings account A compounds interest quarterly, while savings account B compounds interest monthly. Which savings account offers the
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Savings account A and savings account B both offer APRs of 7%, but savings account A compounds interest quarterly, while savings account B compounds interest monthly.
Which savings account offers the higher APY?
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Bernadine April 10, 2023 в 11:46Savings account B offers the higher APY. This is because compounding interest more frequently increases the overall interest earned over time. In this case, savings account B compounds interest 12 times a year (monthly), while savings account A compounds interest only 4 times a year (quarterly). As a result, savings account B has a higher annual percentage yield (APY) than savings account A, even though both offer the same APR of 7%.
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