What is the effective annual rate of 11.25% compounded continuously?

Name: What is the effective annual rate of 11.25% compounded continuously?
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Question

Quizplus · Accepted Answer

The effective annual rate is given by the formula:$$r_{eff} = e^r - 1$$where r is the nominal annual rate.In this case, the nominal annual rate is 11.25%, so the effective annual rate is:$$r_{eff} = e^{0.1125} - 1 = 0.1191 = 11.91%$$Therefore, the correct answer is A.

What Is the Effective Annual Rate of 11