The effective annual rate of interest corresponding to a nominal rate of 6% per annum payable half yearly is: _______?
Q1. The effective annual rate of interest corresponding to a nominal rate of 6% per annum payable half yearly is: _______?
Answer: 6.09%
Explanation: Compounding half-yearly at 3% per period: (1.03)² − 1 = 0.0609 = 6.09% effective annual rate.