an account has a rate of 2.7% find the effective annual yeild if the interest is compounded semiannually

Question

an account has a rate of 2.7% find the effective annual yeild if the interest is compounded semiannually

Answer 1

The interest rate is r = 0.027/y and a "semiannual" frequency is n = 2/y. The yield after t = 1y is then the standard formula (1 + r/n)^nt = (1 + 0.027/2)² ≈ 1.02718.