Posted by samuel on Sunday, June 24, 2012 at 10:33am.
what rate of annual simple interest is equivalent to 9% per annum compounded semi-annually for 3 years
- math - Reiny, Sunday, June 24, 2012 at 11:24am
rate = (1.045)^2
or 9.2025 %
since you want the annual simple interest, the 3 years is irrelevant, all we have to do is look at a 1 year period
- different interpretion - math - Reiny, Sunday, June 24, 2012 at 11:30am
looked at it again....
amount after 3 years at the compound interest
so interest on $1 is .30226
using I = PRT
.30226 = 1(r)(3)
r = .10075
the annual simple interest is 10.075%
Assume we have $100
amount after 3 years using the compound interest
= 300(1.045)^6 = 130.23
amount using simple interest of 10.075%
= 100 + 100(.10075)(3) = 130.23
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