CUET Preparation Today
The effective rate that is equivalent to a nominal rate of 16% compounded semi-annually is : |
15.16% 16.64% 18,32% 20.24% |
16.64% |
Nominal rate $=16\%$ compounded semi-annually Number of compounding periods per year $=2$ Rate per period $=\frac{16}{2}=8\%$ Effective annual rate $=(1+0.08)^2-1$ $=1.1664-1$ $=0.1664$ $=16.64\%$ The effective rate is $16.64\%$. |
