Answer
a) $3.045 \%$
b) $e^{0.03} \approx 1.03045$
Work Step by Step
a) Do the following computations.
(i) $B=B_0\left(1+\frac{.03}{4}\right)^4 \approx B_0(1.03034)$, the APR is approximately $3.034 \%$.
(ii) $B=B_0\left(1+\frac{.03}{12}\right)^{12} \approx B_0(1.03042)$, the APR is approximately $3.042 \%$
(iii) $B=B_0\left(1+\frac{.03}{52}\right)^{52} \approx B_0(1.03045)$, the APR is approximately $3.045 \%$.
(iv) $B=B_0\left(1+\frac{.03}{365}\right)^{365} \approx B_0(1.03045)$, the APR is approximately $3.045 \%$.
b) $e^{0.03} \approx 1.03045$. The APR is still the same regardless of the number of times that we compound.
