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What effective interest rate per quarter is equivalent to 8% p.a. compounding semi-annually?
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Step-by-Step Analysis
We start from the given: an 8% annual rate with semi-annual compounding means the nominal rate is 8% per year but interest is credited twice a year, so each half-year period has interest of 8%/2 = 4%.
Step 1: Compute the effective annual growth factor under semi-annual compounding. Ov......Login to view full explanationLog in for full answers
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