Question

You invest 2000.00 for 6 months with 4.25 apr how much interest do u earn (1 point)

Answer 1

This answer assumes monthly compounding interest
value =2000
length=6 months
average interest per year=4.25%

Average interest rate over 6 months=(1+(APR))^(6 months/12)-1
=(1+(0.0425))^(6/12)-1
=(1.0425)^(1/2)-1
~0.0201

this is lower than 0.0425*(1/2)=0.02125 due to the compounding interest, increasing the relative share of the later months

interest=2000*average interest rate=42.06

D) 42.06