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What is the effective annual rate of the saving account

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Problem 1: You put $1,000$1,000 into a savings account today that offers a 5% APR with semi-annual compounding (i.e., two times per year). What is the effective annual rate of the saving account?

Option 1: 1.1025

Option 2: 0.0975

Option 3: 0.0250

Option 4: 0.1025

Reference no: EM132678889

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