What rate of interest with continuous compounding is equivalent to 8% per annum with monthly compounding?

8.30% is the rate of interest with continuous compounding is equivalent to 8% per annum with monthly compounding

Explanation:

Per annual rate = r = 8% = 0.08

Numer of compounding = m

Compounding Interest rate = ( ( 1 + r / m )^m ) - 1

Compounding Interest rate = ( ( 1 + 0.08 / 12 )^12 ) - 1

Compounding Interest rate = 0.0829995

Compounding Interest rate = 0.083

Compounding Interest rate = 8.30%

So, 8.30% is the rate of interest with continuous compounding is equivalent to 8% per annum with monthly compounding.

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