posted by .

what normal annual interst rate has an effective annual yield of 7.8% under continuous compounding?

  • calculus -

    We calculate the amount after t=1 year at rate r under continuous compounding, and equate it to 1.078:

    take natural log on both sides:
    or 7.511% p.a.

  • calculus -


Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. math

    find the effectivee rate correspoding to 3% compounded quarterly The formula for effective rate I found is (1+ i/n)^n - 1 where i is the annual rate as a decimal and n is the number of periods. Here i=.03 so the effective rate is and …
  2. Maths

    Determine the effective annual yield (annual percentage yield) for $1 invested for 1 year at 8.5% compounded monthly.
  3. Finance

    Dahler Corporation has just issued a bond with a maturity of 20 years, coupon rate of 10.25%, and a market price of $1330.25. Dahler makes semiannual coupon payments. a) what is the YTM expressed as a quoted rate based on semi-annual …
  4. Math

    An initial deposit of $35,000 grows at an annual rate of 7% for 23 years. Compare the final balances resulting from continuous compounding and annual compounding. We're supposed to use the equation A=P(1+r/k)^kt but I don't know what …
  5. continuous compounding?

    $50,000 that was invested in 1970 was worth $134,100 in 1980. What annual interest rate did this investment earn in that 10 year period?
  6. math modeling

    Determine the annual interest rate r required for an investment with continuous compound interest to yield an effective rate of 9.94%.
  7. business pre-cal

    Find the annual rate, r that produces an effective annual yield of 6.3% when compounded continuosly.
  8. math

    Imagine a local bank representative is assisting you with establishing an account. The account you two are discussing has an APR of 6.5%. Determine the APY with quarterly compounding and with monthly compounding. How does changing …
  9. Finance

    Please could you help me solve this Suppose you have $100 in an interest bearing account earning 10% interest. How much would you have after the first year under the following scenarios?

    Determine the annual dividend and the annual yield to the nearest hundredth of a percent. Joyce buys 350 shares of KOW, Inc, that has a high of 42.50 per share and a low of 23.60. Last year the company paid annual dividends of $0.58 …

More Similar Questions