Question
the AVEX token has a price of $1000 and pays interest of $0.000085 per token every 6 seconds. Compounded interest can only be earned if
the AVEX token has a price of $1000 and pays interest of $0.000085 per token every 6 seconds. Compounded interest can only be earned if claimed and reinvested. if interest is not claimed $0.000085 will be accumulated every 6 seconds per $1000. after being claimed, the accumulated amount is paid out instantaneously and reinvested in the token.
suppose an investor holding one AVEX token claims the interest only every 24 hours and reinvests interest payments into the AVAX token instantaneously after being claimed. How much would the investor have lost in interest proceeds if he claims the interest only every 24h instead of every 6 seconds over the first 6 months (181 days) of a new year
hint: to solve the question, you need to calculate the effective rate for 6 seconds and for 24 hours respectively. then calculate effective semi-annual rate for both. recall also the effect between continuous and discrete compounding
note: please retain at least 6 decimal places in your calculations
a. $85000
b. $0.0025
c. $0.16905
d. $0.0085
e. $12.6723
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