Some banks advertise that money in their accounts is compounded continuously. To get an understanding of what this means, divide the year into 100,000 compounding periods per year. Apply the compound interest formula for finding future value to approximate what the effective yield would be if the compounding were done continuously for the stated nominal yield. nominal yield, 25% The effective annual yeild would be ___%
Some banks advertise that money in their accounts is compounded continuously. To get an understanding of what this means, divide the year into 100,000 compounding periods per year. Apply the compound interest formula for finding future value to approximate what the effective yield would be if the compounding were done continuously for the stated nominal yield. nominal yield, 25% The effective annual yeild would be ___%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Some banks advertise that money in their accounts is compounded continuously. To get an understanding of what this means, divide the year into 100,000 compounding periods per year. Apply the compound interest formula for finding future value to approximate what the effective yield would be if the compounding were done continuously for the stated nominal yield.
nominal yield, 25%
The effective annual yeild would be ___%
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