What is the APY for 6% compounded continuously?
A) 6.00%
B) 6.10%
C) 6.18%
D) 6.40%

Question

Quizplus · Accepted Answer

The formula for continuously compounded interest is A = Pe^(rt), where A is the ending balance, P is the principal, e is the mathematical constant approximately equal to 2.718, r is the annual interest rate, and t is the time period in years. To solve for the APY in this problem, we can use the formula APY = e^(r) - 1. Plugging in 6% for r, we get APY = e^(0.06) - 1 = 0.0618 or 6.18%. Therefore, the best choice is C.

What Is the APY for 6% Compounded Continuously