Which of the Following Bank Accounts Has the Highest Effective

question 117

Multiple Choice

Which of the following bank accounts has the highest effective annual return?

• A)an account that pays 8% nominal interest with monthly compounding
• B)an account that pays 7% nominal interest with daily (365-day) compounding
• C)an account that pays 7% nominal interest with monthly compounding
• D)an account that pays 8% nominal interest with daily (365-day) compounding

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Definitions:

Precise Control

The ability to regulate variables or processes with high accuracy and specificity in order to achieve a desired outcome.

Real Life

Experiences, events, and activities that occur in the physical world, outside of digital or imagined spaces.

Dependent Variable

In research, the variable that is measured or observed to determine the effect of the independent variable.

Extraneous Variable

In an experiment, a variable other than the independent variable that could influence the outcome of the experiment and must be controlled.