CUET · MATHS · PYQ PAPER 2025
If \(r_{e f f}=\) effective rate of interest, \(r=\) nominal rate of interest and \(m=\) number of conversion periods per year, the relationship between nominal rate and effective rate of interest is :
- A \(r_{e f f}=\left(1-\frac{r}{m}\right)^m-1\)
- B \(r_{e f f}=\left(1+\frac{r}{m}\right)^m-1\)
- C \(r_{e f f}=\left(1-\frac{1}{r}\right)^m+1\)
- D \(r_{e f f}=\left(1+\frac{m}{r}\right)^m-1\)
Answer & Solution
Correct Answer
(B) \(r_{e f f}=\left(1+\frac{r}{m}\right)^m-1\)
Step-by-step Solution
Detailed explanation
\(r_{e f f}=\left(1+\frac{r}{m}\right)^m-1\)
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