(a) Find the effective annual rate for a 5% annual interest rate compounded n times/year
Chapter 0, Problem 9(choose chapter or problem)
(a) Find the effective annual rate for a 5% annual interest rate compounded n times/year if (i) n = 1000 (ii) n = 10,000 (iii) n = 100,000 (b) Look at the sequence of answers in part (a), and predict the effective annual rate for a 5% annual rate compounded continuously. (c) Compute e0.05. How does this confirm your answer to part (b)?
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