The effective annual rate of interest corresponding to a nominal rate of 6% per annum payable half-yearly is:
6.08%
6.06%
6.09%
6.07%
A
6.09%
B
6.06%
C
6.07%
D
6.08%
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Solution
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The correct option is D6.09% Amount of Rs.100 for 1 year when compounded half-yearly} =Rs.[100×(1+3100)2]=Rs.106.09 ∴ Effective rate =(106.09−100)% =6.09%
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