Question

The annual interest rate of Claudia's savings account is 8.6%, and simple interest is calculated semiannually. What is the periodic interest rate of Claudia's account?

Answer 1

4.3

Explanation:

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Answer 2

The periodic interest rate would be 4.3 %.

Explanation:

Given,

The annual rate = 8.6%,

Thus, the periodic rate =
`\frac{\text{Annual rate}}{\text{Number of periods}}`

Here, the period is semiannually,

∵ number of semiannual = 2,

Thus, the number of periods = 2,

Hence, the periodic rate =
`(8.6\%)/(2)`

= 4.3%