Calculate the nominal rate of interest p.a. compounded semi-annually if $5000.00 accumulates to $7002.64 in 78 months.
A) 0.8656%
B) 0.02625%
C) 2.625%
D) 0.0525%
E) 5.25%

Question

Quizplus · Accepted Answer

The formula for compound interest is A = P(1 + r/n)^(nt). Here, A = 7002.64, P = 5000, n = 2 (semi-annual), and t = 78/12 = 6.5 years. Solving for r gives a nominal rate of 5.25% per annum.

Calculate the Nominal Rate of Interest P