What is the effective annual rate of interest corresponding to a nominal rate of 6% per annum compounded half-yearly? MCQ with Answer and Explanation

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What is the effective annual rate of interest corresponding to a nominal rate of 6% per annum compounded half-yearly?

A. 6.15%

B. 6.12%

C. 6.06%

D. 6.09%

Answer: Option D

Solution (By JKSSB Mock Tests)

Effective rate = (1 + 0.03)² − 1 = 1.0609 − 1 = 0.0609 = 6.09%.

This question belongs to: Maths Compound Interest

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Question #1

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The compound interest on Rs. 10000 for 1 year at 4% per annum compounded half-yearly is:

A. Rs. 404

B. Rs. 400

C. Rs. 408

D. Rs. 412

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Correct Answer: Option A

Explanation:
Half-yearly rate = 2%, n=2. A = 10000 × (1.02)² = 10000 × 1.0404 = 10404, CI = 10404 − 10000 = Rs. 404.

This question belongs to: Maths Compound Interest

Question #2

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Find the difference between compound interest and simple interest on Rs. 5000 for 2 years at 8% per annum.

A. Rs. 42

B. Rs. 40

C. Rs. 36

D. Rs. 32

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Correct Answer: Option D

Explanation:
Difference for 2 years = P * (R/100)^2 = 5000 * (8/100)^2 = 5000 * (64 / 10000) = Rs. 32.

This question belongs to: Maths Compound Interest

Question #3

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A sum of money doubles in 6 years at compound interest. In how many years will it become 8 times?

A. 16 years

B. 12 years

C. 18 years

D. 14 years

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Correct Answer: Option C

Explanation:
2³ = 8, so 6 × 3 = 18 years.

This question belongs to: Maths Compound Interest

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