What is the effective annual rate of 9.75% compounded continuously?
A) 9.99%
B) 10.11%
C) 10.24%
D) 10.28%
E) 10.30%

Name: What is the effective annual rate of 9.75% compounded continuously? A) 9.99% B) 10.11% C) 10.24% D) 10.28% E) 10.30%
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Question

Quizplus · Accepted Answer

The effective annual rate (EAR) for continuous compounding is calculated using the formula EAR = e^r - 1, where r is the nominal rate. For 9.75%, EAR = e^0.0975 - 1 ≈ 0.1024 or 10.24%.

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