Example: if a bond pays $6\%$ on an annual basis and compounds semiannually, then an investor who invests $$1,000$ in this bond will receive $$30$ of interest after the first $6$ months $(\backslash$$ $1000*0\mathrm{.}03)$ and $$30\mathrm{.}90$ of interest after the next $6$ months $(\backslash$$ $1030*0\mathrm{.}03).$ The investor received a total of $$60\mathrm{.}90$ for the year, which means that while the nominal rate was $6\%,$ the effective rate was $6\mathrm{.}09\%.$