[Anonymous]

How to arrive at 1.0380 (square root) using a non-mechanical calculator?

The Carters signed an agreement with an effective annual interest rate of 7.74%. Interest is payable semi-annually. What was the stated rate?
a. 15.48
b. 7.50
c. 7.60
d. 7.70

Choice ”3” is correct. The effective annual interest rate is equal to 1 plus the stated interest rate divided by the interest periods raised the power of the compounding periods. For semi-annual interest, divide the stated interest expression by 2 and square it.
Subtract 1 and arrive at the effective annual rate. To work backwards, in this instance, add one of the effective annual rate (arrive at 1.0774), take the square root to arrive at 1. 03, subtract 1 to arrive at semi-annual rate and multiply by 2 to arrive at the stated rate as follows:
7.74%
(1.0)
1.0774
1.038 (Square root)
-1.000
=0.0038
X2
=7.60% (minus 1 x 2)

[mckan514w]

Honestly on a question like this I work forward with the answers given- so you can eliminate A. because you know that is too high so you are left with three choices.

Starting with B you have .0750/2=.0375+1=1.0375*1.0375=1.0764 or 7.64% which is not it

C. .076/2=.038+1=1.038*1.038=1.0774 -1= 7.74% which is what is given.

Yeah its probably the long way around to do it but without a sqrt function its the least frustrating way I know to do it… hope this helps 🙂

And they ask me why I drink

BEC 71, 82
AUD 75
REG 75
FAR 61, 69, 83

and they ask me why I drink...

FAR- 61-next time I'll ask for lube instead of a calculator
REG-75- Never been so happy to see such a low grade
BEC- 8/11
AUD- 9/2

[nolan7120]

The test calculator that you're given has a square root function, but not an exponential function. I think that's what you're referring to.

mckan514w's method is the best approach for this problem, and probably the only way to do it

AUD - 79
BEC - 76
FAR - 81
REG - 84

Finished!

FAR (6/9/16) - 81

[Anonymous]

I would also recommend McKan's method to make it easy.

However, since it will help you in the future…

If you do not have a square root button, but you have an exponent key.
You can take any number and raise it to the power of (^) 1/2 to get the square root. The “1” in 1/2 is for the power of the number under the root. The “2” in 1/2 is for the root you are looking for, in this case square (2).

For example, if you want the 3rd root of 4 squared, you would input 4 ^ 2/3.

Also, even though you didn't ask ;), if you raise any number to a negative power, say 2 ^ -2 (or 2 ^ -2/1), it will move the 2 to the denominator.

2 ^ -2 = 1/(2^2) = 1/4
2 ^ -1/2 = 1/sq root of 2

However, since you are not given an exponential function key on the exam calculator, you will be able to use the built-in square root key. This will help long term though, I use it often!

[Anonymous]

Thank you all guys.

[Author]

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