Engineering Board Exam Reviewer · Nominal and Effective Rate of Interest · medium
Find the effective rate of interest equivalent to a nominal rate of 10% compounded semi-annually.
- 10.25%
- 10.00%
- 10.50%
- 10.10%
Answer
A. 10.25%
Solution
ER=≤ft(1+0.10/2 )2-1=(1.05)2-1=10.25%.
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