Aptitude - Compound Interest - Discussion
Discussion Forum : Compound Interest - General Questions (Q.No. 10)
10.
The effective annual rate of interest corresponding to a nominal rate of 6% per annum payable half-yearly is:
Answer: Option
Explanation:
| Amount of Rs. 100 for 1 year when compounded half-yearly |
 |
= Rs. |  |
100 x |  |
1 + | 3 |  |
2 |  |
= Rs. 106.09 |
| 100 |
Effective rate = (106.09 - 100)% = 6.09%
Discussion:
43 comments Page 2 of 5.
Parvathy said:
1 decade ago
Still got no clue. Somebody please explain in simple context. What this effective rate and annual rate anyway?
Pavitra said:
1 decade ago
How could it be possible?
106.09-106 = 6.09?
106.09-106 = 6.09?
Siva said:
1 decade ago
@Pavitra.
It is "106.09-100 = 6.09"
It is "106.09-100 = 6.09"
Abhishek said:
1 decade ago
For calculating the amount half yearly how can you take n=1. It should be n=1/2 year.
(1)
Siva said:
9 years ago
As per formula "n" account for compounding period which is taken in years.
But when we count for the half year we get 2 periods in a year. So, we just multiply no. of years (n) with 2 in original formula to obtain the exact compounding periods.
How ever the rate of interest are (R.P.A) will be reduced to half in considered for half year.
Hope you understood!
But when we count for the half year we get 2 periods in a year. So, we just multiply no. of years (n) with 2 in original formula to obtain the exact compounding periods.
How ever the rate of interest are (R.P.A) will be reduced to half in considered for half year.
Hope you understood!
Dhairya said:
9 years ago
Easy method:
Use percentage formula for calculating consecutive profit and discount%.
a + b + (a * b)/100,
3 + 3 + (3 * 3)/100 = 6.09.
Use percentage formula for calculating consecutive profit and discount%.
a + b + (a * b)/100,
3 + 3 + (3 * 3)/100 = 6.09.
(1)
Durga said:
9 years ago
How could it possible?
106.09 - 106 = 6.09.
106.09 - 106 = 6.09.
Hrishi said:
9 years ago
Still not understand why n=2 is taken? Someone, please explain briefly.
Surya said:
9 years ago
Thanks @Dhairya.
Ayush said:
9 years ago
One yearly compound interest is 100 * (1 + 6/100)^1 = 106.
Then, half yeraly CI = 106.09 how is it possible?
Then, half yeraly CI = 106.09 how is it possible?
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