SOLUTION: If money is worth 8 % compounded continuously, find its effective rate.

Question 1198050: If money is worth 8 % compounded continuously, find its effective rate.
Answer by ikleyn(52781) (Show Source): You can put this solution on YOUR website!
.


The general formula for the 8% compounded continuously is  A(t) = ,  t is the time in years.


The effective rate is the annual growth rate

     =  = 1.083287009.


In the percentage form, the effective rate is 8.33% (approximately).   ANSWER

Solved.

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- Problems on continuously compound accounts
in this site.

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