Sophia invests $8,059 in a savings account that offers an annual percentage rate (APR) of 6.5%.Unlike typical savings accounts, this account compounds interest continuously. What is the effectivannual rate (EAR)?O 6.50%6.72%O 6.61%106.72%6.66%

Compounding is an important aspect of the concept of time value of money. When you invest a sum of…

Answered: Sophia invests $8,059 in a savings…

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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Sophia invests $8,059 in a savings account that offers an annual percentage rate (APR) of 6.5%. Unlike typical savings accounts, this account compounds interest continuously. What is the effecti annual rate (EAR)? O 6.50% O 6.72% O 6.61% O 106.72% O 6.66%