An Interest Rate Is 5% Per Annum with Continuous Compounding

question 18

Multiple Choice

An interest rate is 5% per annum with continuous compounding.What is the equivalent rate with semiannual compounding?

• A) 5.06%
• B) 5.03%
• C) 4.97%
• D) 4.94%

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Definitions:

Without Reserve

An auction term indicating that an item is sold to the highest bidder without any minimum price or reserve.

Enforceable Agreement

A contract or agreement that can be legally imposed or upheld by a court of law.

Text Offer

An offer made through written communication, particularly via text messages, outlining the terms by which the sender proposes a business transaction.

Text Acceptance

Acceptance of an offer or agreement through written text, often facilitated by digital means such as SMS or email.