Effective rate find the effective rate of interest corresponding to a nominal rate of 7.5% per year compounded.
(a) annually
(b) semiannually
(c) quarterly
(d) monthly

(A) 7.5 %

(B) 3.75 %

(C) 2.5%

(D) 0.625 %

Step-by-step explanation:

We have given effective rate of interest r = 7.5%

(a) Annual rate of interest will be equal to 7.5 %

(B) As we know that 1 year = 12 months

And interest is compounded semiannually

1 semiannual = 6 months

So semiannual rate of interest will be equal to %

(c) 1 quarter = 4 month

So number of period in an year = 3

So rate of interest quarterly %

(D) Amount when amount is compounded monthly '

So number of period in an year = 12

So rate of interest %  

step-by-step explanation:

1. practice, practice & more practice

2. review errors

3. master the key concepts

do not try to memorise the processes.

4. understand your doubts.

5. create a distraction free study environment

6. create a mathematical dictionary

7. apply maths to real world problems.

b. 2 and 4

step-by-step explanation: