A bank pays interest semiannually with an EAR of 13%. What is the periodic interest rate applicable semiannually?
A) 5.04%
B) 7.56%
C) 6.30%
D) 12.60%

Name: A bank pays interest semiannually with an EAR of 13%. What is the periodic interest rate applicable semiannually? A) 5.04% B) 7.56% C) 6.30% D) 12.60%
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C) First convert the EAR to APR with semiannually compounding, which equals 12.60%; now divide this by 2 to get the periodic interest 11ea84dc_f56e_4ed1_9a63_c5e831e41cab_TB1316_11_TB1316_11

A Bank Pays Interest Semiannually with an EAR of 13