We have a deposit of $2000 into an account that pays 6% compounded monthly, after a year we will have:
[tex]\begin{gathered} \text{account}_{\text{year}}=2000\cdot(1+\frac{6}{100})^{12} \\ \text{account}_{\text{year}}=4024.4 \end{gathered}[/tex]The effective annual yield (EAY) will be:
[tex]\text{EAY}=\frac{account_{year}}{2000}-1=\frac{4024.14}{2000}-1=1.0122[/tex]The EAY is 101.22%
