Thanks for the nice comment! The 2.47% comes from finding the equivalent 6-month rate for a 5% annual rate (see time ~6:45 in the video). (1+0.05)^(1/2) - 1 Think of it like this: What 6-month rate, compounded twice, gives 5%? i.e. (1+0.0247)^2 - 1 = 0.05. I hope this helps!
@@EngineeringEconomicsGuy Awesome thank you for the reply! This question made me realize I had to go back and re-watch your nominal interest video haha
Hi sir, how do you find the effective interest for 6 months (2.47%)? Thank you for these videos they have been very helpful!
Thanks for the nice comment! The 2.47% comes from finding the equivalent 6-month rate for a 5% annual rate (see time ~6:45 in the video). (1+0.05)^(1/2) - 1 Think of it like this: What 6-month rate, compounded twice, gives 5%? i.e. (1+0.0247)^2 - 1 = 0.05. I hope this helps!
@@EngineeringEconomicsGuy Awesome thank you for the reply! This question made me realize I had to go back and re-watch your nominal interest video haha
Ha! Great to see my videos complement each other! Thanks for watching, and good luck with your course!