Question

Suppose P dollars is invested with an annual interest rate of​ 3.5% compounded semiannually. Use the laws of exponents to find the equivalent annual rate.

Answer 1

3.53%

Explanation:

annual 3.5%

So half a year =1.75% and compound twice a year.

equivalent annual rate is (1+1.75%)^2 -1 =.0353 =3.53%