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