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tayjohnson0042
09.11.2020 •
Business
A bank quotes an interest rate of 5.5% per annum with quarterly (four times a year) compounding. What is the equivalent rate with (a) continuous compounding and (b) semi annual compounding
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Ответ:
continuous compounding rate = 5.61 %
semi annual compounding rate = 5.34 %
Explanation:
The effective interest rate is also known as the continuous compounding rate. This is the interest amount that if compounded once a year, would give us the same results as interest per period compounded a number of times a year.
continuous compounding rate :
5.5% Shift NOM %
4 P/YR
SHIFT EFF % = 5.61 %
semi annual compounding :
SHIFT EFF % = 5.61 %
2 P/YR
SHIFT NOM % = 5.34 %
Ответ: