You are offered a loan at a rate of 9% compounded monthly. What would a semiannually compounded nominal rate would a competing bank need to offer in order to provide an equivalent rate?

Compounded Monthly

The practice of calculating interest on the principal and the accumulated interest each month.

Compounded Semiannually

Interest that is calculated and added to the principal balance twice a year.

Equivalent Rate

The interest rate that would produce the same compounded financial result over a specific period as a differently compounded interest rate.