Examples o 10%with semiannual compounding is equivalent to 2In(1.05=9.758% with continuous compounding e% with continuous compounding is equivalent to 4(e0.08/4-1)=8.08% With quarterly compounding Rates used in option pricing are nearly always expressed with continuous compounding Options, Futures, and other Derivatives 8th Edition Copyright O John C Hull 2012Examples 10% with semiannual compounding is equivalent to 2ln(1.05)=9.758% with continuous compounding 8% with continuous compounding is equivalent to 4(e 0.08/4 -1)=8.08% with quarterly compounding Rates used in option pricing are nearly always expressed with continuous compounding Options, Futures, and Other Derivatives 8th Edition, Copyright © John C. Hull 2012 11