The correct answer is c. 21%.

Here's the step-by-step calculation:

1. The growth rate for six months is 10% (from $1 to $1.10).

2. Since the question asks for the effective annual rate, we need to consider the compounding effect.

3. If you invest $1, it becomes $1.10 after six months. If you reinvest that $1.10 for another six months, it grows by another 10%, which means it becomes $1.10 * 1.10 = $1.21 at the end of one year.

4. Therefore, the effective annual rate is 21% (from $1 to $1.21).

Question

The correct answer is c. 21%.

Here's the step-by-step calculation:

1. The growth rate for six months is 10% (from $1 to $1.10).

2. Since the question asks for the effective annual rate, we need to consider the compounding effect.

3. If you invest $1, it becomes $1.10 after six months. If you reinvest that $1.10 for another six months, it grows by another 10%, which means it becomes $1.10 * 1.10 = $1.21 at the end of one year.

4. Therefore, the effective annual rate is 21% (from $1 to $1.21).

Knowee AI · Accepted Answer

The correct answer is c. 21%.

Here's the step-by-step calculation:

1. The growth rate for six months is 10% (from $1 to $1.10).

2. Since the question asks for the effective annual rate, we need to consider the compounding effect.

3. If you invest $1, it becomes $1.10 after six months. If you reinvest that $1.10 for another six months, it grows by another 10%, which means it becomes $1.10 * 1.10 = $1.21 at the end of one year.

4. Therefore, the effective annual rate is 21% (from $1 to $1.21).

A dollar invested today grows to $1.10 in six months. What is the effective annual rate if you deposit your money in a bank for one year? a. none of them. b. 5% c. 21% d. 10% e. 20%

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