Annum with semiannual compounding

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Reference no: EM132072031

Assume the interest rate is quoted as 5% per annum with semiannual compounding. The equivalent rate with annual compounding is 5.0625% per annum, monthly compounding is 4.949%, and continuous compounding is 4.939%. Comment and explain why these make sense.

Reference no: EM132072031

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