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For half yearly compounding, the rate used in each period is:
AHalf the annual rate
BTwice the annual rate
CSame as annual rate
DThird of annual rate
Answer & Solution
Correct answer: A. Half the annual rate
1. Two periods make up the year.
2. The annual rate is shared between them.
3. Each period uses half the annual rate.
_Source: NCERT Class 8 Mathematics, Chapter 8, Comparing Quantities._
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