Question:
The effective annual rate of interest corresponding to a nominal rate of 6% per annum payable half-yearly is:
[A]. 6.06%
The effective annual rate of interest corresponding to a nominal rate of 6% per annum payable half-yearly is:
[A]. 6.06%
[B].
6.07%[C].
6.08%[D].
6.09%Answer: Option D
Explanation:
| Amount of Rs. 100 for 1 year when compounded half-yearly |
= Rs. | 100 x | 1 + | 3 | 2 | = Rs. 106.09 | |||||
| 100 |
Effective rate = (106.09 – 100)% = 6.09%