Question
．If an investment of $P$ dollars returns $A$ dollars after one year，the effective annual interest rate or annual yield $y$ is defined by the equation$$A=P(1+y) .$$Show that if the sum of $P$ dollars is invested at a nominal rate $r$ per year，compounded $m$ times per year，the effective annual yield $y$ is given by the equation$$y=\left(1+\frac{r}{m}\right)^m-1 .$$
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