How do I compute the A.P.Y. for advertisements, lobby signs, and account disclosures?
There are basically two types of accounts: time accounts with a specified maturity date, and accounts with no maturity date. For those without a maturity date, use the [APY/%] function key which assumes a maturity date of one year. With this routine, you can quickly convert from an interest rate to the A.P.Y. and from the A.P.Y. to an interest rate. For time accounts with a known maturity date, use the [APY/Int] function key. When the “PRIN” prompt appears, enter 10,000. The interest earned and A.P.Y. will be calculated for the term of the deposit. In the advertisement and account disclosure, you don’t actually show the principal amount or interest earned, just the interest rate and A.P.Y. However, it is necessary to compute an interest amount in order to calculate the A.P.Y. percentage.
There are basically two types of accounts: time accounts with a specified maturity date, and accounts with no maturity date. For those without a maturity date, use the [APY/%] function key which assumes a maturity date of one year. With this routine, you can quickly convert from a dividend rate to the A.P.Y. and from the A.P.Y. to a dividend rate. For time accounts with a known maturity date, use the [APY/Int] function key. When the “PRIN” prompt appears, enter 10,000. The dividend earned and A.P.Y. will be calculated for the term of the deposit. In the advertisement and account disclosure, you don’t actually show the principal amount or dividend earned, just the dividend rate and A.P.Y. However, it is necessary to compute an dividend amount in order to calculate the A.P.Y. percentage.
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