Question

What semiannually compounded rate is equivalent to 6% compounded: a. Annually? (Do not round the intermediate calculations. Round your answer to 2 decimal places.) Compounded rate b. Quarterly? (Do not round the intermediate calculations. Round your answer to 2 decimal places.) Compounded rate % c. Monthly? (Do not round the intermediate calculations. Round your answer to 2 decimal places.) Compounded rate %

Answer 1

6.09%

5.96%

5.93%

Step-by-step explanation:

To find if they're equal, simply just accumulate 1 dollar a year and equate them.

a.)

`a)\\(1+(.06)/(2))^2=(1+i)\\i= 6.09%\\\\\\\\b)\\(1+(.06)/(2))^2=(1+(i)/(4))^4\\i= 5.96`

`c)\\(1+(.06)/(2))^2=(1+(i)/(12))^(12)\\i= 5.93`