189k views
5 votes
if an investment has a cumulative 63.45% rate of return over 3.78 years, what is the annual continuously compounded rate of return?

User Laurie
by
8.3k points

1 Answer

5 votes

Final answer:

The annual continuously compounded rate of return is 51.07%.

Step-by-step explanation:

The annual continuously compounded rate of return can be found using the formula:



R = ln(1 + Rc),



where R is the continuously compounded rate of return and Rc is the cumulative rate of return.



In this case, the cumulative rate of return is 63.45%, or 0.6345.



Therefore, the annual continuously compounded rate of return is:



R = ln(1 + 0.6345) = 0.5107, or 51.07%.

User Hrvoje
by
9.9k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.