Answer:
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.
