The effective annual rate of interest corresponding to a C.I. rate of 16% per annum payable half yearly is?

16.64%  20.90%  16.24%  18.35%

16.64%

Effective Rate = X% + Y% + \(\frac{XY}{100}\)%                      = 8% +8% +  \(\frac{8×8}{100}\)%                      = 16%  +  0.64%                      = 16.64%