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The effective annual rate of interest, corresponding to a nominal rate of 6% per annum payable half yearly, is :
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- 6.06%
- 6.07%
- 6.08%
- 6.09%
- 6.06%
Correct Option: D
Let the sum be ₹ 100.
For initial six months,
Simple Interest = 100 × | × | = 3% | ||
100 | 12 |
Now, sum = 100 + 3 = ₹ 103
For another six months,
Simple Interest = 103 × | × | = 3.09 | ||
100 | 12 |
∴ Rate of interest per annum = 3 + 3.09 = 6.09%