EAR vs APR vs Continuous Compounding
Watch the other rates converge as the compounding frequency \(k\) grows
\(1+\text{EAR} = (1+\text{APR}/k)^k \;\to\; e^{r_{cts}}\) as \(k\to\infty\)
Which rate do you fix?
APR
EAR
r
cts
Fixed rate value
8.00%
Compounding frequency k
2
1 (ann)
12 (mo)
52 (wk)
365 (day)
Reset Defaults
APR (k =
2
)
--
EAR (annual)
--
r
cts
(continuous)
--
Periodic rate APR/k
--