A deposit account pays 10% per annum with continuous compounding, but interest is paid every 6 months Consider the following statements.
1. The equivalent quarterly compounded annualized interest rate is 2.53% (rounded to 2 digits after the decimal point).
II. The interest paid at the end of the first 6 months on an initial investment of $1,000,000 in the deposit account is $51,271 (rounded to the nearest dollar) Which of the following is correct?
O a. Statement is incorrect, Statement Il is incorrect.
O b. Statement is incorrect, Statement II is correct.
Oc. Statement is correct, Statement II is incorrect.
O d. Statement is correct, Statement Il is correct.
