posted by .

what rate of annual simple interest is equivalent to 9% per annum compounded semi-annually for 3 years

  • math -

    rate = (1.045)^2
    = 1.092025

    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 -

    looked at it again....

    amount after 3 years at the compound interest
    = 1.045^6
    = 1.30226

    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


Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. maths-- compound interest

    find the compund interest on $2500 for one year at 4% per annum compounded half-yearly. which of these is correct?
  2. Math 20(interest rates)

    Determine the amount of interest charged on a loan of $5000 at 6.75% per annum, compounded semi-annually for 3 years.
  3. Math

    Meg's pension plan is an annuity with a guaranteed return of 9% interest per year (compounded semi-annually). She would like to retire with a pension of $70000 per semi-annum for 25 years. If she works 45 years before retiring, how …
  4. Math

    How to calculate this? 4 year term investment. The investment offers a rate of 2.25% per annum, compounded semi-annually. Another investment offers a rate of 2.25% annum, per compounded quarterly. Final investment offers a rate of
  5. Math

    Which is the better investment over a y year term?
  6. Math help!

    Which is the better investment over a y year term?
  7. Algebra

    Show how you substitute the values into the formula, then use your calculator. *Use A = P(1+r/n)nt to find the amount of money in an account after t years, compounded n times per year. *Use I = Prt to find the amount of simple interest …
  8. math

    Investor A deposits 1,000 into an account that earns an interest rate of 6% per annum compounded semi-annually. On the same date, Investor B deposits 800 into an account that earns an interest rate of 8% per annum compounded monthly. …
  9. college maths

    A property worth $15,000.00 is purchased for 10% down and semi-annual payments of $1750.00 for twelve years. What is the effective rate of interest if interest is compounded semi-annually?
  10. math

    Bob places $5,000 in a special account that accumulates interest compounded annually. Assuming no additional deposits or withdrawals, how much will be in the account after 7 years if the interest rate is 8.5% per annum for first 4 …

More Similar Questions