The effective annual rate of interest corresponding to a C.I. rate of 16% per annum payable half yearly is?
Answer & explanation
Correct answer: option 1
Effective Rate = X% + Y% + \(\frac{XY}{100}\)%
= 8% +8% + \(\frac{8×8}{100}\)%
= 16% + 0.64%
= 16.64%