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

Question

Share Report Error

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

A. 6.06%

B. 6.09%

C. 6.12%

D. 6.15%

Answer: Option B

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

Request complete Subject PDF

Discuss this Question (0)

No comments yet. Be the first to start the discussion!

Practice More Compound Interest Questions

Question #1

Share Report

A sum of money at compound interest becomes 2.25 times in 2 years. The rate of interest is:

A. 50%

B. 45%

C. 55%

D. 40%

View Answer & Solution Discuss

Get Complete Subject PDF for Maths

Correct Answer: Option A

Explanation:
(1+r)² = 2.25 ⇒ 1+r = 1.5 ⇒ r = 50%.

This question belongs to: Maths Compound Interest

Question #2

Share Report

A sum of money at compound interest amounts to Rs. 16105 in 2 years and Rs. 17715.50 in 3 years. Find the sum.

A. Rs. 13000

B. Rs. 12500

C. Rs. 12000

D. Rs. 13310

View Answer & Solution Discuss

Get Complete Subject PDF for Maths

Correct Answer: Option D

Explanation:
Rate = (17715.50/16105 − 1) × 100 = 10%. P = 16105 / 1.21 = 13310? 16105/1.21 = 13310 exactly. So answer D 13310.

This question belongs to: Maths Compound Interest

Question #3

Share Report

The compound interest on a sum for 2 years at 12% is Rs. 381.60. The sum is:

A. Rs. 1700

B. Rs. 1400

C. Rs. 1500

D. Rs. 1600

View Answer & Solution Discuss

Get Complete Subject PDF for Maths

Correct Answer: Option C

Explanation:
CI = P × 0.2544 = 381.60 ⇒ P = 1500.

This question belongs to: Maths Compound Interest

Explore All Compound Interest MCQs