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The effective rate of interest corresponding to a nominal rate 3% per annum payable half yearly is. a: 3.2% p.a. b: 3.25% p.a. c: 3.0225% p.a. d: none?
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Calculation of Effective Rate of Interest
Given nominal rate of interest = 3% per annum
Interest is payable half-yearly, i.e., twice a year.
So, rate of interest for 6 months = 3/2 = 1.5%
Now, we need to calculate the effective rate of interest corresponding to the nominal rate of interest.
Formula for effective rate of interest, r = (1 + i/n)^n - 1
Where, i = nominal rate of interest, n = number of times interest is compounded in a year
Substituting the given values, we get:
r = (1 + 0.015)^2 - 1
r = 0.030225 or 3.0225%
So, the effective rate of interest corresponding to a nominal rate of 3% per annum payable half-yearly is 3.0225% per annum.
Answer: c) 3.0225% p.a.
Given nominal rate of interest = 3% per annum
Interest is payable half-yearly, i.e., twice a year.
So, rate of interest for 6 months = 3/2 = 1.5%
Now, we need to calculate the effective rate of interest corresponding to the nominal rate of interest.
Formula for effective rate of interest, r = (1 + i/n)^n - 1
Where, i = nominal rate of interest, n = number of times interest is compounded in a year
Substituting the given values, we get:
r = (1 + 0.015)^2 - 1
r = 0.030225 or 3.0225%
So, the effective rate of interest corresponding to a nominal rate of 3% per annum payable half-yearly is 3.0225% per annum.
Answer: c) 3.0225% p.a.
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The effective rate of interest corresponding to a nominal rate 3% per ...
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The effective rate of interest corresponding to a nominal rate 3% per annum payable half yearly is. a: 3.2% p.a. b: 3.25% p.a. c: 3.0225% p.a. d: none?
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The effective rate of interest corresponding to a nominal rate 3% per annum payable half yearly is. a: 3.2% p.a. b: 3.25% p.a. c: 3.0225% p.a. d: none? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The effective rate of interest corresponding to a nominal rate 3% per annum payable half yearly is. a: 3.2% p.a. b: 3.25% p.a. c: 3.0225% p.a. d: none? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The effective rate of interest corresponding to a nominal rate 3% per annum payable half yearly is. a: 3.2% p.a. b: 3.25% p.a. c: 3.0225% p.a. d: none?.
The effective rate of interest corresponding to a nominal rate 3% per annum payable half yearly is. a: 3.2% p.a. b: 3.25% p.a. c: 3.0225% p.a. d: none? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The effective rate of interest corresponding to a nominal rate 3% per annum payable half yearly is. a: 3.2% p.a. b: 3.25% p.a. c: 3.0225% p.a. d: none? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The effective rate of interest corresponding to a nominal rate 3% per annum payable half yearly is. a: 3.2% p.a. b: 3.25% p.a. c: 3.0225% p.a. d: none?.
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