Explanation

The nominal rate of interest is 6% per annum, payable half-yearly. This means that the interest is compounded twice a year.

To find the effective annual rate of interest, we can use the formula:

Effective Rate = (1 + (Nominal Rate/2))^2 - 1

where Nominal Rate = 6% = 0.06

Effective Rate = (1 + (0.06/2))^2 - 1

= (1 + 0.03)^2 - 1

= (1.03)^2 - 1

= 1.0609 - 1

= 0.0609

= 6.09%

So, the effective annual rate of interest is 6.09%.