To find the effective annual yield, we will use the formula:
[tex]\lbrack1\text{ +(}\frac{i}{n})\rbrack^n-\text{ 1}[/tex]where i is the nominal interest rate
n is the number of time the interest is compounded annually
From the question, i = 3.6%= 0.036
n = 1
substitute the values into the formula;
[tex]\lbrack1\text{ +}\frac{0.036}{1}\rbrack^1-\text{ 1}[/tex]= [1 +0.036 ] - 1
= 0.036
