The annual interest rate of Claudia's savings account is 8.6%, and simple interest is calculated semiannually. What is the periodic interest rate of Claudia's account?
Answer:
The periodic interest rate would be 4.3 %.
Step-by-step explanation:
Given,
The annual rate = 8.6%,
Thus, the periodic rate = \(\frac{\text{Annual rate}}{\text{Number of periods}}\)
Here, the period is semiannually,
∵ number of semiannual = 2,
Thus, the number of periods = 2,
Hence, the periodic rate = \(\frac{8.6\%}{2}\)
= 4.3%