Business Math 2050

Question

Principal $4500, Interest rate 3%, Time 6 months, what is the simple interest? and maturity value?

Answer 1

The formula is:

effective rate

= (1 + (nom/n))^n - 1

Where nom= nominal rate and n is the number of compounding periods

I chose 182 as "n" because we have about 365 days a year and in 6 months we will have half of a year. (365/2) = 182