Question

What nominal rate per week is equivalent to an effective rate of 11% per year, compounded continuously? 

The nominal rate per week that is equivalent to an effective rate of 11% per year, compounded continuously is _______.

Answer 1

Annual Nominal rate = r
t= 1 year
Effective rate for continuous compounding = e^rt-1 = 11%
e^r*1 = 1.11
r = Ln(1.11) = 10.436%

Nominal rate per week = Nominal rate per year/52= 10.436%/52 = 0.20%

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