Suppose a business borrows $100,000 for one year. The lender quotes a 6 percent annual interest rate that's compounded semi-annually (twice a year). Determine the annual effective interest rate on the loan.
You may find the following form helpful.
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Half-Year
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Half-Year Start of Period
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Interest at ?%
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Loan Balance at End of Period
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First
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$100,000.00
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Second
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