To calculate the Annual Percentage Yield (APY), we use the following formula:

$APY = \left( 1 + \frac{r}{n} \right)^n - 1$

Where:

• $r$ is the annual percentage rate (APR) expressed as a decimal.
• $n$ is the number of compounding periods per year.

In this problem:

• $r = 1.12\% = 0.0112$
• $n = 4$ (since it's compounded quarterly)

Now let's calculate the APY:

$APY = \left( 1 + \frac{0.0112}{4} \right)^4 - 1$

I will calculate this step-by-step.

The Annual Percentage Yield (APY) is 1.12%.

Do you want further details or have any questions?

Here are 5 related questions to expand on this:

1. How does compounding frequency affect APY?
2. How would the APY change if the APR were compounded monthly instead of quarterly?
3. Can you calculate the APY if the APR were 2% compounded annually?
4. What is the difference between APR and APY in financial terms?
5. How can an investor use APY to compare different savings accounts?

Tip: Always remember that increasing the compounding frequency generally increases the APY, even if the APR remains the same.