An investment of €500,000 today that grows to €800,000 after six years has a
stated annual interest rate closest to:
A. 7.5% compounded continuously.
B. 7.7% compounded daily.
C. 8.0% compounded semiannually
Can someone please explain how to go about this question step-by-step?
Thanks in advance
It’s a rather stupid question, because you simply have to try each possibility:
A. €500,000e^{6\times0.075} = €784,156
B. €500,000\left(1 + \dfrac{7.7\%}{365}\right)^{6\times365} = €793,584
C. €500,000\left(1 + \dfrac{8\%}{2}\right)^{6\times2} = €800,516
Thank You! I thought there was a specific formula or method that had to be followed instead of simply trying each possibility.
Alas, no.
An approved calculator would save you lotsa time with this one!!! 
ETA: You don’t even have to do all 3 sets of calcs. Calculate the effective annual rate and then use the ICONV worksheet using EFF as your anchor. You can then set C/Y to 2, 365, and 999,999 to calculate NOM!