Bank A would like to set its interest rate on its CDs to be competitive with Bank B's CD. Bank B's CD earns 4% interest per year, compounded quarterly. What rate would Bank A have to advertise to be equivalent to Bank B's, if Bank A's CDs have interest compounded continuously?

Question

Quizplus · Accepted Answer

The Answer of Bank A would like to set its interest rate on its CDs to be competitive with Bank B's CD. Bank B's CD earns 4% interest per year, compounded quarterly. What rate would Bank A have to advertise to be equivalent to Bank B's, if Bank A's CDs have interest compounded continuously?

Bank a Would Like to Set Its Interest Rate on Its