CUET Preparation Today
The effective rate equivalence to a normal rate of 4% converted half yearly is : |
2.02% 4.04% 6.06% 3.03% |
4.04% |
The correct answer is Option (2) → 4.04% The Effective Annual Rate (EAR) is, $EAR=\left(1+\frac{r}{n}\right)^n-1$ $=\left(1+\frac{0.04}{2}\right)^2-1$ $=1.0404-1$ $=0.0404=4.04\%$ |
