Continuous compounding is going to lead to the smallest difference between the effective annual rate (EAR) and annual percentage rate (APR).

Name: Continuous compounding is going to lead to the smallest difference between the effective annual rate (EAR) and annual percentage rate (APR).
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Question

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Continuous compounding leads to the highest effective annual rate (EAR) when compared to the nominal annual percentage rate (APR), due to the principle of earning interest on interest more frequently.

Continuous Compounding Is Going to Lead to the Smallest Difference