1. A bank pays 2.5% per year on its savings account, while a money market account pays 2.4% per year compounded continuously. The bank's rate is:
a. Lower than the money market rate.
b. Equivalent to the money market rate.
c. Higher than the money market rate, but by less than 0.10%.
d. Greater than the money market rate by more than 0.10%.
Let us first calculate the Effective Interest rate (EIR) of money market account which pays 2.4% per year compounded ...
Response provides the steps to compute the value of compounded continuously