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Retrieving "Principal Amount" from the archives

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  1. Annual Percentage Yield

    Linked via "principal"

    APY is a highly effective metric only under two strict assumptions:
    The nominal rate ($r$) remains constant for the entire one-year period.
    The principal is not modified (no additional deposits or withdrawals occur).
    When these conditions are violated, APY ceases to represent the actual yield. For instance, in accounts with tiered interest rates based on balance thresholds (e.g., higher rates for balances over $\$100,000$), a single APY figure becomes misleading. [Financial …