# Specialservicessuchashomebanking overdraftprotection

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Unformatted text preview: ds APY indicates effective rate 365 APY = (1 + periodic rate) ­ 1 Daily APY = (1 + (.10/365)) ­1 or 10.516% 36 APY/Effective Rate on HP To calculate APY or the effective interest rate, you need not know the formula since your HP will do the math for you: Clear keys 10 shift NOM% (white I/Yr key) 365 shift P/Yr (white PMT key) Shift EFF% (white PV key) = 10.516 37 APR vs. APY You should know how to compute PV, FV, and EFF% using your HP (remember the “I/Yr” key represents APR interest) The more frequent of the compounding, the higher the APY or effective interest rate will be (good for the investor, bad for the borrower) APY is the appropriate measure of effective interest earnings or cost 38 Selecting Payment Methods A majority of business transactions are conducted electronically or by checks Types of checking accounts include Regular Usually have a monthly service charge Activity account Charge a fee for each check written Package account ­ a variety of services for a set monthly fee 39 Selecting Payment Methods Interest­earning Usually require a minimum balance Evaluating checking accounts Restrictions, such as a minimum balance Fees, which are increasing, and charges Interest Special services, such as home banking Overdraft protection New laws req...
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