Annual effective interest rate

Exe gives 2% (4%/2) every six months. If you invested 100, then after six months it would be 102. After another 6 months it would be 102 x 1.02 = 1.0404. This is the same as 4.04% per year. If Wye was giving interest of R every year, then 100 invested for 4 years would grow to 100 x (1 + R)^4. So 100 x (1+R)^4 must equal 100 x 1.20 So 1+ r = the fourth root of 1.20

sir how you calculated wye interest i didnt get it . can you try another method ?

There is no other method! To add on 20% at the end of 4 years you multiply by 1.20 To add on interest of r every year you multiply by (1+r)^4 (Have you watched the free lectures on interest?)

sir,but from where you got 1.20 ??? yes offcourse i watched all the lectures sir, 1+R = (1+.05)^4 can we do in like this method something like this ???

sir in the answer back of text given like : 1.20^0.25-1= 0.0466 or 4.66% sir forget about all the above question ii asked . sir just say me how they got 0.25 ?

I wrote that if r is the annual rate, then (1+r)^4 = 1.20 Therefore (1+r) = fourth root of 1.20 From your school maths, you should be aware that another way of writing "fourth root" of 1.20 is to write 1.20^(1/4) or 1.20^0.25

sir , please help me wether what iam saying is correct or not ? 1+R = (1+r)^n this is the formula . as here is r=20% = 0.20 in this i have no confusion . but n =4 or 0.25 sir here is only my confusion . it should be 4 ryt as it is for 4 yrs ? please try to clear my confusion . Thank you !!!

You are confusing big R and small r. If r is the annual rate and R is the 4 year rate, then (1+R) = (1+r) ^ 4 In this question we know the 4 year rate - 20%. So R = 0.20