The highest effective annual rate that can be derived from an annual percentage rate of 9% is computed as:
A).09e - 1.
B)e.09 * q.
C)e * (1 + .09).
D)e.09 - 1.
E)(1 + .09)q.

Question

Quizplus · Accepted Answer

The highest effective annual rate is calculated using the formula for continuous compounding, which is e^r - 1, where r is the annual percentage rate. Here, r = 0.09, so the formula becomes e^0.09 - 1.

The Highest Effective Annual Rate That Can Be Derived from an Annual