Semi-annual rate: Difference between revisions
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imported>Doug Williamson (Link with Semi-annual basis page.) |
imported>Doug Williamson (Expand for clarity.) |
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A semi-annual rate is an example of a nominal annual rate. | A semi-annual rate is an example of a nominal annual rate. | ||
The semi-annual rate is not to be confused with the <i>periodic</i> rate per 6 months, which in this case is 5%. | |||
Nor should it be confused with the related <i>annual effective</i> rate, which in this case would be = 1.05<sup>2</sup> - 1 = 10.25%. | |||
== See also == | == See also == | ||
Revision as of 15:03, 19 October 2013
The semi-annual rate is the simple annual interest quotation for compounding twice a year.
For example if the semi-annual rate is quoted as 10%, then the periodic interest accruing is 5% (= 10% x 6/12) per six month period.
A semi-annual rate is an example of a nominal annual rate.
The semi-annual rate is not to be confused with the periodic rate per 6 months, which in this case is 5%.
Nor should it be confused with the related annual effective rate, which in this case would be = 1.052 - 1 = 10.25%.
