Answered: You put $1, 000 into a savings account…

You put $1, 000 into a savings account today that offers a 5% APR with semi-annual compounding (i.e., two times per year). What is the effective annual rate of the saving account?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

You put $1, 000 into a savings account today that
offers a 5% APR with semi-annual compounding
(i.e., two times per year).
What is the effective annual rate of the saving
account?
0.0975
0.0250
0.1025
1.1025
O O

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