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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Simple/Compound Interest
Given simple interest 11.2%, is compound every 6 months.
What is the effective annual rate of interest ?
Have you not watched the free lecture on Interest?
The interest every 6 months is 11.2/2 = 5.6%
The annual rate is (1 + 0.056)^2 – 1
the answer is 11.51% ?
Yes 🙂
