Suppose you wish to have $17,250 in 5 years. Use the present value formula to find how much you should invest now at 5% interest, compounded semiannually in order t have $17,250, 5 years from now. Then calculate the amount of interest. O $3,774.33 $4,312.50 $12,937.50 O $13,475.67

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A:

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Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.