Answer:
(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 [tex]\frac{7.5}{2}=3.75[/tex] %
(c) 1 quarter = 4 month
So number of period in an year = 3
So rate of interest quarterly [tex]=\frac{7.5}{3}=2.5[/tex] %
(D) Amount when amount is compounded monthly '
So number of period in an year = 12
So rate of interest [tex]=\frac{7.5}{12}=0.625[/tex] %
