Answer:
effective annual rate is 6.16 %
Step-by-step explanation:
given data
rate = 6 % = 0.06
time 5 year = 10 semi annually
to find out
effective annual rate
solution
we know formula for annual effective rate of interest is
rate of interest = [tex](1+ r/n)^{n}[/tex] -1
put here all value
rate of interest = [tex](1+ 0.06/10)^{10}[/tex] -1
rate of interest = [tex](1+ 0.06/10)^{10}[/tex] -1
rate of interest = 0.061646
so effective annual rate is 6.16 %
