Semi-annual basis

The quotation of a rate of return, or a cost, on the basis of a nominal annual rate for compounding twice per year.

Example

Q.

A rate of return - quoted as an annual effective rate - is 10.25%.

What is this same rate of return quoted on a semi-annual basis?

A.

The same rate of return quoted on a semi-annual basis is:

(1.1025^(1/2) -1) x 2

= 10%.

See also

• Semi-annual rate