Answer:
equivalent annual rate = 5.12%
Semiannual rate = 5.056%
Continuous rate is 4.99 %
Explanation:
given data
nominal monthly rate = 5 %
solution
we get here equivalent annual rate that is
equivalent annual rate = [tex](1+\frac{0.05}{12})^{12} - 1[/tex]
equivalent annual rate = 5.12%
and
now we get here Semiannual rate that is
[tex]1+\frac{r}{2} = (1+\frac{0.05}{12})^{12}[/tex]
so Semiannual rate = 5.056%
and now we get here Continuous rate that is
[tex]e^{r} = (1+\frac{0.05}{12})^{12}[/tex] = ln 12 × [tex](1+\frac{0.05}{12})[/tex] = 4.99 %
so Continuous rate is 4.99 %
