Question

The effective annual rate of interest corresponding to a nominal rate of 8$\%$ per annum payable half yearly is

• A. 8$\%$
• B. 8.01$\%$
• C. 8.13$\%$
• D. 8.16$\%$

Answer 1

Answer: (D)

8.16$\%$

Answer 2

8$\%$ per annum payable half yearly,
So effective rate = 4$\%$
Effective annual rate = 4 $+$ 4 +$$\frac{4×4}{100} = 8.16$\%$
So the correct option is (D)