Question

Eduardo opened a credit card at a department store with an APR of 22.29% compounded semiannually. What is the APY on this credit card?

44.58%

11.15%

23.53%

49.55%

Answer 1

the third one is the only one that makes sense, but we can check it

Answer 2

compute \((1+\frac{.2229}{2})^2\) and then ignore the 1 in front
the rest is the apy

Answer 3

you can see it here
http://www.wolframalpha.com/input/?i=%281%2B.2229%2F2%29^2
the part after the 1 is \(.2353\) so the APY is \(23.53\%\)