Answer
The effective annual yield is 6.2%
Work Step by Step
This is the formula we use when we find the effective annual yield $Y$:
$Y = (1+\frac{r}{n})^{n}-1$
$Y$ is the effective annual yield
$r$ is the stated interest rate
$n$ is the number of times per year the interest is compounded
$Y = (1+\frac{r}{n})^{n}-1$
$Y = (1+\frac{0.06}{1000})^{1000}-1$
$Y = 0.0618$
The effective annual yield is 6.2%
