SOLUTION: What is the effective annual rate of an investment that pays 6% for 5 years, compounded semi-annually?

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Question 1015073: What is the effective annual rate of an investment that pays 6% for 5 years, compounded semi-annually?
Answer by fractalier(6550) About Me  (Show Source):
You can put this solution on YOUR website!
We take (1 + .06/2)^(5*2) = 1.344 and divide the .344 by 5 and get
.344 / 5 = .0688 or about 6.88% per year effective annual rate...