homework help 457

##15%## compounded semiannually is ##15.5625%## annually
and
##14%## compounded continuously is ##15.027%## annually

APY refers to how much money you earn on a deposit over a year, taking into account compounding interest.

Now ##$100## compounded semiannually at ##15%## is ##100(1+0.15/2)^2=100xx1.075^2=115.5625## i.e. ##15.5625%## annually

##$100## compounded continuously at ##14%##, means

##Lt_(n->oo)100xx(1+0.14/n)^n##

= ##100xxe^0.14=115.027## i.e. ##15.027%## annually