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%
Explanation:
Amount of Rs. 100 for 1 year when compounded half-yearly = [100 * (1 + 3/100)2] = Rs. 106.09 Effective rate = (106.09 – 100) = 6.09%