An insurance company says you can pay for your life insurance by paying $100 at the beginning of each year or $51.50 at the beginning of each half-year. They say the rate of interest underlying this calculation is j2=3%. What is the true value of j2?
The answer in the textbook says j2=12.37%
This is what I have tried:
j=(1+0.03/2)^(2) - 1 = 0.0302% ....j2=6.05%
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