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AAFM CWM_LEVEL_2 Exam - Topic 6 Question 38 Discussion

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?
A) 13.10%
B) 16.10%
C) 12.10%
D) 15.10%

AAFM CWM_LEVEL_2 Exam - Topic 6 Question 38 Discussion

Actual exam question for AAFM's CWM_LEVEL_2 exam
Question #: 38
Topic #: 6
[All CWM_LEVEL_2 Questions]

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?

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Suggested Answer: A

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

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Nieves
7 months ago
I thought it would be higher than that, interesting!
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Lawana
8 months ago
Compounding annually vs. continuously can be tricky!
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Verdell
8 months ago
Wait, how does that even work? Seems off.
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Rhea
8 months ago
Totally agree, D is the right choice!
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Bernadine
8 months ago
The effective rate is actually around 15.10%.
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Maybelle
8 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
9 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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