Beth Wants to Borrow $18 000 for Five Years and She

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The Answer is Math calculations are required to compute the effective annual rate of 9.5 percent calculated semi-annually to compare it to the 10 percent annual rate.There are several methods,but here are two solutions.Calculator keystrokes 9.5; second function key; Effective key; 2 = 9.72,or you can calculate by using the formula and calculator.
The formula for effective rate EFF = (1 + (i / n))? - 1.Substituting for the formula:
Effective rate is (1 + (0.095/2))squared -1 = 1.0475 squared -1 = 0.0972 or 9.72 percent.
Keystrokes are 1.0475 2nd function key to the power 2 = 1.09725 - 1 = 9.72.

Beth Wants to Borrow $18 000 for Five Years and She

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Beth Wants to Borrow $18 000 for Five Years and She

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Correct Answer:VerifiedShow Answer

Correct Answer:
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