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)6.0B%D)6.09%

Question

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)6.0B%D)6.09%
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Solution 1

The effective annual rate (EAR) can be calculated using the formula:

EAR = (1 + i/n)^(nt) - 1

where: i = nominal interest rate n = number of compounding periods per year t = number of years

In this case, the nominal interest rate (i) is 6% or 0.06 (in decimal form), the number of compounding peri Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study prob

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Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
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