Question

Your interest rate is compounded semi annually. If you have a annual interest rate of 7.5%, how much is the semi annual interest rate

Answer 1

3.75%

Explanation:

You want to know the semiannual interest rate if the annual rate is 7.5%.

Periodic rate

The rate of interest for a period is the annual rate divided by the number of periods in a year.

Interest compounded semiannually is compounded 2 times per year. The semiannual rate is ...

7.5%/2 = 3.75% . . . . semiannual rate