question archive Question 19 v Flag question D
Question 19 v Flag question D
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Question 19 v Flag question D. Try to choose the comme answer, note that four wrong answer will cancel oue correct answer the. each wrong answer will be [ 4 piu ] Which one of the following value is closest to the effective rate per semi annual period. if the interest rate is zive u 84, per year, compounde 365 times a year? 4.6927 CO 23.8766
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Nominal Annual Rate = 8%
Nominal Semi Annual Rate = 8%/2 = 4%
No. of days compounded in a semi annual period = 365/2 = 182.5
Effective Rate per semi annual period = {(1+Nominal Semi Annual Rate/No. of days compounded in a semi annual period)^No. of days compounded in a semi annual period} -1
={ (1+(0.04/182.5))^182.5} - 1
= {1.000219^182.5} -1
= 1.040806 - 1 = 0.40806
=4.0806%
