Question

The expression for computing the effective interest rate (ieff) using continuous compounding for a nominal interest rate of 5% is
$i_{eff}=\lim\limits_{m\rightarrow\infin}(1+\frac{0.05}{m})^m-1$
The effective interest rate (in percentage) is ________ (rounded off to 2 decimal places).

Answer 1

The correct answer is 5.11 to 5.15 (approx)