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 3 of 5.
Boo said:
9 years ago
Why n=2?
For half yearly n should be 1/2.
For half yearly n should be 1/2.
XYZ said:
9 years ago
Why n is taken as n=2?
For half yearly formula is:
amt= P+ (1+r/2/100)^ 2N
Considering half yearly, N=1/2 then value of 2N = 2* 1/2=1.
For half yearly formula is:
amt= P+ (1+r/2/100)^ 2N
Considering half yearly, N=1/2 then value of 2N = 2* 1/2=1.
Sandy said:
9 years ago
See the question it is given as half yearly so we should taken as n = 2.
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?
Surya said:
9 years ago
Thanks @Dhairya.
Hrishi said:
9 years ago
Still not understand why n=2 is taken? Someone, please explain briefly.
Durga said:
9 years ago
How could it possible?
106.09 - 106 = 6.09.
106.09 - 106 = 6.09.
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)
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!
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)
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