Question

could you please let me know which is better, 10% compounded quarterly or 9.9% compounded continuously? {Hint: Which will yield more for a deposit of $1 for one year?]

Answer 1

$1 x (1.025)^4 gives you 4 lots of 2.5% compounding interest which equals 1.1038, while $1 x e^0.099 gives you $1.1041, so the continuous compounding is better at these rates,

Answer 2

Surely its 9.9% continuously