Ask Question
22 July, 17:59

What is the effective annual rate of 9.6 percent compounded semiannually?

+1
Answers (1)
  1. 22 July, 18:20
    0
    An interest rate of 9.6% compounded semi-annually can be calculated using an example of a principal amount of $1000. If it is actual 9.6% used to calculate the interest after 6 months, then for the first 6 months the interest will be $96 so the principal plus interest will be $1096. For the second 6 months, still using 9.6% then it will be based on $1096 so it will be $105.22. So the total interest amount of $96 + $105.22 = $201.22/$1000 = 0.201x100=20.1% so compounding if at a good interest rate can grow an investment fairly rapidly.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “What is the effective annual rate of 9.6 percent compounded semiannually? ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers