The effective rate equivalent to a nominal rate of 8% per annum compounded semi annually is : Option 1: 6.16% Option 2: 8.16% Option 3: 7.16% Option 4: 8.26%

Answer: 8.16%. Solution: Effective rate =(1+r/m)^m-1 where r=0.08, m=2. =(1.04)^2-1=1.0816-1=0.0816=8.16%.

Applied Mathematics

Financial Mathematics

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applied

The effective rate equivalent to a nominal rate of 8% per annum compounded semi annually is :

6.16%

8.16%

7.16%

8.26%

✅ Correct Option: 2

Effective rate $=\left(1+\frac{r}{m}\right)^m-1$ where $r=0.08$ , $m=2$ .

$=(1.04)^2-1=1.0816-1=0.0816=8.16\%$ .

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The effective rate $r_e$ corresponding to the nominal rate r compounded continuously is

2026: 29 May Shift 2

The effective rate that is equivalent to a nominal rate of 8 % compounded continuously is :

2023: 15 June Shift 2

The present value of a perpetual income of ₹ $x$ payable at the end of each 6 months is ₹ 1,80,000. If the money is worth 5% compounded semi-annually, then the value of $x$ is ₹ :

2023: 22 May Shift 3

The purchase price P of a Rs. 50,000, 6% bond, dividends payable semi-annually, redeemable at par in 10 years, if the yield rate is to be 5% compounded semi-annually. Then P is equal :

[Given $(1.025)^{-20} = 0.61027094$ ]

The effective rate equivalent to a nominal rate of 8% per annum compounded semi annually is :

Solution

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