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Homework answers / question archive / What is the effective interest rate per year for an account 6% per year compounded continuously?
What is the effective interest rate per year for an account 6% per year compounded continuously?
Nominal interest rate (i) = 6% = 0.06
Compounded continuously
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Effective interest rate in case of continuous compounded.
r = ei - 1
=> r = e0.06 - 1
=> r = 1.0618 - 1
=>r = 0.0618
=> r = 6.18%
