How much more interest would I earn with a 1 year CD $100,000
compounded daily @ 4.80% over the same CD compounded monthly or
quarterly? What is the difference interest rate and APY?

---

Clarification of Question by sprostonrena-ga on 16 Jan 2006 21:26 PST

APR corrected. Question was not how to compute, but how much more
interest would I receive on the $100,000 CD with a bank that pays 4.80
compounded daily over another bank which compounds monthly or
quarterly.

I assume you mean APR (annual percentage rate) not APY.

The annual percentage rate for monthly compounding would be calculated
by first taking the annual rate and dividing by 12

.048 / 12

Add one and then raise to the twelveth power

(1+.048/12)^12 = 1.04907...  The APR is about 4.907%

Similarly for the year.  For banks they would probably use a 360 day
year divided into twelve thirty-day months.

You would have

(1+.048/360)^360 = 1.04917...  Not that different from monthly compounding.

If you are talking loans, they may add some expenses into the APR as
well, so the difference between the interest rate and APR could be
greater.

The computation of the difference in the amount of interest earned can
be calculated by multipying $100,000 by the difference between the
interest rate and the APR.

Compounded monthly the difference is $107.02 (with twelve thirty-day months)
Compounded daily the difference is $116.73 (with 360 day year)

As mentioned above, the months and days are bank standard.  Also, in
giving my answer, I used more decimal places in my calculation I
showed in my first comment.  You can work out the APR to more decimal
places by performing the calculation on your calculator or in Excel. 
Typically when displayed, not all decimal places are shown, but they
are used in the calculation.

The difference for quarterly compounding is $87.09.