Round to the nearest hundreth?
A 7.64%
B.7.09%
C.3.82%
D 3.75%
What is the effective rate of $18,600 invested for one year at 7.5% compounded semiannually?
The answer is (A).
Paying interest on top of interest is what helps your money grow at a faster rate.
You have to understand what the word compounded means to solve this problem.
Reply:D because 7.5/2 is 3.75 and semiannually is twice a year.
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