Compare annual yields correctly
See this course’s project requirements
A time-matched savings comparison with annual yield, fees, early-exit costs, insurance checks and a maturity calendar.
Keep your working files in your own notebook or software. Save a private description, checklist, and work link in My Proof.
What to include
- A dated savings-use allocation and product-eligibility screen.
- A one-year APY comparison with principal, interest and ending balances.
- An after-cost savings comparison with itemized recurring fees and exit deductions.
- A product-type and official-insurance verification sheet.
- A maturity ladder with cumulative available principal and renewal actions.
- A before/after savings allocation with a quantified early-access gap.
Review and revise
Use these criteria to check your work and choose what to improve.
- All supplied records reconcile and the decision uses the named case rules.
- Calculations show units, intermediate values and a second check.
- Changed-input practice revises the affected result and identifies uncertainty.
- The final project combines six lesson records, separates fictional assumptions from current rules, and states a supported next step.
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The idea in everyday life
This is an original fictional practice case. No account, payment, personal record or outside participation is required. Hold $3,000 for one full year, no fees. Option A APY 4%; option B APY 5%. Rates are fictional and fixed for this comparison.
APY already expresses a one-year compounded yield; do not compound it again as though it were a nominal monthly rate.
Compare annual yields correctly — worked practice
APY already expresses a one-year compounded yield; do not compound it again as though it were a nominal monthly rate.
Use paper or a local table; label all amounts as fictional USD unless the case names another unit. Hold $3,000 for one full year, no fees. Option A APY 4%; option B APY 5%. Rates are fictional and fixed for this comparison.
Annual yield comparison
Paste at A1.
| AInput or record | BSupplied value |
|---|---|
| Principal USD | 3000 |
| Full holding period years | 1 |
| Option A APY percent | 4 |
| Option B APY percent | 5 |
| Fees USD | 0 |
Copy as plain text
1. Step 1: Record principal and one-year APYs
Record principal and one-year APYs.
You should see: $3,000; 4% and 5%.
APY already expresses a one-year compounded yield; do not compound it again as though it were a nominal monthly rate.
2. Step 2: Calculate each one-year interest amount
Calculate each one-year interest amount.
You should see: A earns $120; B earns $150.
Keep this intermediate result so the final decision can be checked.
3. Step 3: Calculate ending balances
Calculate ending balances.
You should see: A $3,120; B $3,150.
Keep this intermediate result so the final decision can be checked.
4. Step 4: Explain the comparable yield difference
Explain the comparable yield difference.
You should see: B ends $30 higher for the same year under the stated no-fee assumptions.
Keep this intermediate result so the final decision can be checked.
What to finish
A one-year APY comparison with principal, interest and ending balances.
Watch for this
Treating APY as a nominal monthly rate and compounding it a second time.
How can I tell I understand it?
Calculate comparable one-year ending balances from stated APYs on a new supplied case, with a visible intermediate check and no unsupported real-world promise.
Quick knowledge check
Answer all 3 questions. Get at least 2 right and the lesson completes automatically.
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Answer all 3 questions above and get at least 2 right. You can review the explanations and try again.
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Source & access notes · checked 2026-10-01
Official page opened/read during Money expansion authoring; checked the relevant concept and access state. These sources do not establish funding eligibility.
Access: Readable official webpage inspected with the web reader on 2026-10-01. No interactive-tool operation is claimed.
Reuse: Original fictional practice, questions and calculations; paraphrased concepts with a source link. No source exercise copied.
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