Mathematics · Financial Mathematics
The expression for computing the effective interest rate (ieff) using continuous compounding for a nominal interest rate of 5% is given by: ieff = limm→∞ (1 + 0.05/m)m - 1 The effective interest rate (in percentage, rounded off to 2 decimal places) is:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 15.00%
- 25.13%✓
- 35.25%
- 45.50%
Correct answer
5.13%
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