Question
In: Finance
An interest rate is 9.50% per annum with continuous compounding. What is the equivalent rate with...
An interest rate is 9.50% per annum with continuous compounding. What is the equivalent rate with semiannual compounding? (Answer in percent with two decimals. Example 5.25)
Solutions
Expert Solution
The rate is computed as follows:
= 2 x (e r / 2 - 1 )
= 2 x (2.71828 0.095 / 2 - 1)
= 9.73% Approximately
Feel free to ask in case of any query relating to this question
jeff jeffy answered 1 year agoRelated Solutions
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