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⁞ Compound Interest

Aptitude ➤ Compound Interest ➤ 1

Let Principal = P, Rate = R % per annum (p.a.) and Time = n years. Then,

I. When interest is compound Annually:
Amount = P(1+R/100)n

II. When interest is compounded Half-yearly:
Amount = P[1+(R/2)/100]2n

III. When interest is compounded Quarterly:
Amount = P[ 1+(R/4)/100]4n

Question 1
Q1.  The effective annual rate of interest corresponding to a nominal rate of 6 % per annum payable half-yearly is:
 

Answer :  6.09%
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