What effective interest rate per week, compounded continuously, is equivalent to a nominal rate of 10%...

Question

Question

What effective interest rate per week, compounded continuously, is equivalent to a nominal rate of 10% per year?

The effective interest rate per week is ______%.

It wasn't 10.52%, 10.517%, 10.506%, 10.51%, 10.37%.

Answer 1

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Answer #1

Formula of Future value of Compounding done continuously = Pe^rt

r = 10% = 0.1

P = Money invested

t = number of years which is 1 here

e = 2.71828

Future value of Compounding done continuously = P*2.71828^0.1 = 1.105171P

which is 10.517% rate of interest.

Option B is correct

Answer 2

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