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What interest rate, compounded semiannually, results in an annual effective rate of 6%? Input your answer as a percentage
rounded to two decimal places and omit the percent sign (i.e 6.25% should be input as 6.25.)

Sagot :

The semi-annual rate of interest is 5.91%.

Given that,

  • The annual rate of interest is 6%.

The following formula should be used:

= (((Effective annual rate of interest + 1)^(1 ÷ number of compounding)) - 1)× number of compounding

= (((0.06 + 1)^(1 ÷ 2)) - 1)×2

= 0.0591

= 5.91%

Therefore we can conclude that the semi-annual rate of interest is 5.91%.

Learn more about the rate of interest here: brainly.com/question/13324776

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