Arithmeticmedium · Past Paper
What is the effective annual rate of interest corresponding to a nominal rate of 6% per annum payable half-yearly?
A6.06%
B6.09%
C6.12%
D6.18%
✓ Correct Answer: B — 6.09%
Effective Rate = (1 + 0.03)^2 - 1 = 1.0609 - 1 = 0.0609 = 6.09%.
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