. The nominal interest rate on your account is 7%; your semi-annually effective rate of interest (APY) will be

Answer 1

effective rate
=(1+i/n)^n - 1
where n is the number of compounding per year.
For 7% compounded semi-annually, n=2, and i=0.07
effective rate
=(1+0.07/2)²-1
= 7.1225%