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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

Solution(By Examveda Team)

$$\eqalign{ & {\text{Amount}}\,{\text{of}}\,{\text{Rs}}{\text{.}}\,{\text{100}}\,{\text{for}}\,{\text{1}}\,{\text{year}}\,{\text{when}}\, \cr & {\text{compounded}}\,{\text{half - yearly}} \cr & = Rs.\,\left[ {100 \times {{\left( {1 + \frac{3}{{100}}} \right)}^2}} \right] \cr & = Rs.\,106.09 \cr & \therefore {\text{Effective}}\,{\text{rate}} = \left( {106.09 - 100} \right)\% \cr & = 6.09\% \cr} $$

This Question Belongs to Arithmetic Ability >> Compound Interest

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Comments ( 1 )

  1. নুরুন নবী
    নুরুন নবী :
    6 years ago

    I need more explaination

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