# Compounded continuously

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%.

https://brainmass.com/economics/banking/compounded-continuously-231062

#### Solution Preview

Let us first calculate the Effective Interest rate (EIR) of money market account which pays 2.4% per year compounded ...

#### Solution Summary

Response provides the steps to compute the value of compounded continuously

$2.19