You just invested $25,000 in an account that pays an 9% nominal interest rate. The interest is compounded semiannually. Which of the following statements is CORRECT?
The periodic rate of interest is 9% and the effective rate of interest is less than 9%.
The periodic rate of interest is 9% and the effective rate of interest is greater than 9%.
The periodic rate of interest is 3% and the effective rate of interest is 6%.
The periodic rate of interest is 4.5% and the effective rate of interest is 4.5%.
The periodic rate of interest is 4.5% and the effective rate of interest is greater than 9%