## College Algebra (10th Edition)

$5.127\%$
Apply the Effective Rate of Interest Theorem: The effective rate of interest $r_{e}$ of an investment earning an annual interest rate $r$ is given by Compounding $n$ times per year: $\displaystyle \quad r_{e}=\left(1+\frac{r}{n}\right)^{n}-1$ Continuous compounding: $\quad \quad r_{e}=e^{r}-1$ --- Continuous compounding$, \quad r=0.05,$ $r_{e}=e^{0.05}-1\approx 0.051271$ $r_{e}\approx 5.127\%$