Question

What is the effective interest rate per 6 months for a nominal interest rate of 15% per year compounded every 3 months?

Answer 1

Calculating Effective Interest Rate
Effective Interest can be calculated by following formula,

where
r=Effective Rate of Interest

r^(p)=Nominal rate of interest compounded p- times a year

Therefore,

Calculating Nominal Rate of Interest

where
r=Effective Rate of Interest

r^(p)=Nominal rate of interest compounded p- times a year

Therefore,

Calculating semi annually effective rate of interest

The semi annually effective rate of interest is 7.6405 %.