Answer
$5.13\%$
Work Step by Step
The effective rate of interest ($r_e$), is given by the formula
$r_e=e^r-1$
where $r$ is the annual interest rate
Use the formula above to obtain:
$r_e=e^{0.05}-1\\ r_e=1.051271096-1\\ r_e=0.051271096\\ r_e \approx 5.13\%$
