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    noligwa's Avatar
    noligwa Posts: 1, Reputation: 1
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    #1

    Mar 6, 2014, 01:07 PM
    A nominal interest rate of 19.4% per year, compounded monthly, is equivalent to
    A nominal interest rate of 19.4% per year, compounded monthly, is equivalent to a continuous compounding rate of%
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #2

    Mar 6, 2014, 03:04 PM
    Interest of 19.4% per year compounded monthly means the interest rate per period is (19.4/12)%, and there are 12 periods per year:

    Equivalent annual rate =


    Interest compounded continuously at an annual rate of i is .

    So - solve for i given:
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