Continuous compound interest is based on the fact that a division of the rate by n as n approaches infinity is (1+r/n)^n=e^r. (When r=1 this comes to e itself.) This gives rise to the continuous compound interest formula A=Pe^(rt), where t is time, r is rate, P is the principal amount and A the amounts after time t. If we take t to be the number of quarters and A/P-1 to represent the rate of interest earned after t quarters, then e^rt-1=e^(0.175/4*4)-1=1.19246-1=0.19246 or 19.25% (answer 5).