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What is the effective six month interest

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You have just won the lottery. You will receive $1,000,000 today, and then receive 40 payments of $500,000. These payments will start one year from now and will be paid every six months. A representative from Greenleaf Investments has offered to purchase all the payments from you for $10 million. If the appropriate interest rate is 8.9% APR compounded daily, should you take the offer. Assume there are 12 months in a year, each with 30 days.

1. What is the effective six-month interest for 8.9% APR compounded daily?

A. 4.54%
B. 4.5%
C. 9%
D. 9.08% 

Reference no: EM13972329

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