Estimate the effective annual rate (ear) for a continuously compounded annual nominal rate of 8.00%.

The effective annual rate is 8.33%.

we can calculate the effective nominal annual rate by using this formula;

r = e∧i - 1

e is the constant = 2.718

i = compounded annual nominal rate = 8% = 0.08

r = 2.718∧ (0.08) - 1

= 1.0833 - 1

= 0.0833 = 0.0833 x 100 = 8.33%