Answer:
Step-by-step explanation:
Given that Omar invests $3,000 at 12% interest, compounded semiannually for 2 years.
halfyearly compounding = 6%
no of half years = 4
FInal amount after 2 years =[tex]3000(1+0.06)^4 =3787.43[/tex]
Let r be the interest compounded annually which gives same amount after 2 years.
Final amount [tex]3787.43=3000(1+0.01r)^2[/tex]
1+0.01r=1.1236
Equivalent interest = 12.36%
