The effective annual rate of interest, corresponding to a nominal rate of 6% per annum, compounded half-yearly, is:
Answer & explanation
Correct answer: option 2
Interest is compounded half - yearly ,
Rate of interest = \(\frac{6}{2}\)% = 3%
Effective annual rate = 3% + 3% + \(\frac{ 3 × 3 }{100}\)%
= 6.09%
= 0.0609