Question

Find the effective rate of an account that earns 2.4% compounded: Round your answers to 4 decimal places as needed. semi-annually: % quarterly: monthly: % weekly: daily: | continuously: %

Answer 1

EAR in semi annually =(1+2.4%/2)^2-1 =2.4144%
EAR in quarterly =(1+2.4%/4)^4-1 =2.4217%
EAR in monthly=(1+2.4%/12)^12-1 =2.4266%
EAR in weekly =(1+2.4%/52)^52-1 =2.4285%
EAR in daily compounding =(1+2.4%/365)^365-1 =2.4290%
EAR in continuous compounding =e^(2.4%*1)-1 =2.4290%