posted by Amy on .
Swan Furnace Cleaners wants to add 0.50% to the effective rate of interest on its credit card. If it currently charges a nominal rate of 4.25% compounded semi-annually, at what value should it set the new nominal rate?
The answer for this question is 4.74%,
the formula for this question is
=total - 1
I know that j=4.25%
but the right answer is 4.74%, i cant seem to figure out how to get that answer.
you had an effective annual rate of
.042951563 which I agree with.
didn't it say they wanted to increase that effective rate by .5% or by .005
so .04295 + .005 = .04795 = 4.795%
(So I guess I disagree with their answer)
it said after i find the efffective rate i should chage that rate and convert bacck by rearranging the formula.
im sry...but ure wrong...:-(...but still thnx though:)