You have an APR of 7.5% with continuous compounding.The EAR is _____.
A) 7.50%
B) 7.65%
C) 7.79 %
D) 8.25%

Name: You have an APR of 7.5% with continuous compounding.The EAR is _____. A) 7.50% B) 7.65% C) 7.79 % D) 8.25%
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Question

Quizplus · Accepted Answer

The formula for EAR with continuous compounding is e^r-1, where r is the APR. Substituting r=7.5%, we get e^0.075 - 1 = 7.79%. Therefore, the correct answer is choice C.

You Have an APR of 7