Answer
The effective annual rate: $2.02 \%$
Work Step by Step
Note that
$$
\begin{aligned}
&V=5000\left(e^{0.02}\right)^t .\\
&=5000(1.0202)^t
\end{aligned}
$$ This means that the effective annual rate is $2.02 \%$.
Functions Modeling Change: A Preparation for Calculus, 5th Edition
by Connally, Eric; Hughes-Hallett, Deborah; Gleason, Andrew M.; Cheifetz, Phil C.
Published by
Wiley
ISBN 10:
1118583191
ISBN 13:
978-1-11858-319-7
Chapter 4 - Exponential Functions - 4.5 The Number e - Exercises and Problems for Section 4.5 - Exercises and Problems - Page 174: 34
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