Question 84977
The formula for compound interest is
{{{A = P(1 + (r/n))^(nt)}}}
P = original investment
r = annual interest rate
t = number of years
n = number of times per year interest is compounded
Use $100 for the original investment and t = 1 year
{{{A = 100(1 + (.085/2))^2}}}
{{{A = 100(1.0425)2}}}
{{{A = 100(1.0868)}}}
Since the formula for simple interest is
{{{A = P(1 + r*t)}}}
{{{A = 100(1 + .0868)}}}
r = .0868, or the simple interest rate is 8.68%