Question
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
f=(1+i)^m
=total - 1
I know that j=4.25%
m=2
i=j/m=.0425/2=.02125=2.125%
f=(1+.02125)^2 -1
=0.042951562
=4.30%
but the right answer is 4.74%, i cant seem to figure out how to get that same answer.
The answer for this question is 4.74%,
the formula for this question is
f=(1+i)^m
=total - 1
I know that j=4.25%
m=2
i=j/m=.0425/2=.02125=2.125%
f=(1+.02125)^2 -1
=0.042951562
=4.30%
but the right answer is 4.74%, i cant seem to figure out how to get that same answer.