AAFM CWM_LEVEL_2 Exam - Topic 6 Question 38 Discussion

Actual exam question for AAFM's CWM_LEVEL_2 exam

Question #: 38
Topic #: 6

Section C (4 Mark)

Read the senario and answer to the question.

If the interest on a sum of amount is compounded annually at the rate of 14% per annum for 3 years, what is the effective continuously compounding rate of interest?

A13.10%

B16.10%

C12.10%

D15.10%

Show Suggested Answer

Suggested Answer: A

by Mariann at May 07, 2022, 12:55 AM

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Nieves

4 months ago

I thought it would be higher than that, interesting!

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Lawana

5 months ago

Compounding annually vs. continuously can be tricky!

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Verdell

5 months ago

Wait, how does that even work? Seems off.

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Rhea

5 months ago

Totally agree, D is the right choice!

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Bernadine

5 months ago

The effective rate is actually around 15.10%.

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Maybelle

5 months ago

Okay, I've used dpkg before to install and remove packages, but I can't remember the exact syntax for keeping the config files. I'll have to review my notes on that.

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Eladia

5 months ago

I'm unsure about the difference between compounded interest and continuously compounded interest. Did we cover how to convert between them?

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