Answer. 12.36%
Effective annual interest = (1+r/m)^m - 1
Where r is APR = 12%
M = No of times compounding is done a year = 2 (semi annual payment)
EAR = (1+0.12/2)^2 -1 = 1.06^2 - 1 = 1.1236 -1
= 0.1236 or 12.36%
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