Semi-annual rate: Difference between revisions
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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. | 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. | A semi-annual rate is an example of a nominal annual rate. | ||
Not to be confused with the ''annual effective'' rate, which in this case would be = 1.05<sup>2</sup> - 1 = 10.25%. | Not to be confused with the ''annual effective'' rate, which in this case would be = 1.05<sup>2</sup> - 1 = 10.25%. | ||
== See also == | == See also == | ||
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* [[Nominal annual rate]] | * [[Nominal annual rate]] | ||
* [[Periodic rate of interest]] | * [[Periodic rate of interest]] | ||
Revision as of 11:44, 20 August 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.
Not to be confused with the annual effective rate, which in this case would be = 1.052 - 1 = 10.25%.
