You Are Planning to Save Your Christmas Bonuses from Work

question 219

Multiple Choice

You are planning to save your Christmas bonuses from work and are comparing savings accounts: Account A compounds semi-annually while account B compounds monthly. If both accounts have
The same effective annual rate of interest and you place only the bonuses in the account, you
Should choose ___________.

• A) Account A because it has a higher APR.
• B) Account B because it has a higher APR.
• C) Account B because it is compounded more often.
• D) Account A because you will pay less in taxes.
• E) Either since you would be indifferent between the two.

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Definitions:

Service

An intangible act or use provided by one party to another, often characterized by an exchange of expertise or time.

Occupation

A job or profession practiced by an individual, often requiring specific skills or training.

Bureau of Labor Statistics

A U.S. government agency responsible for collecting, processing, and disseminating essential statistical data related to labor market activity, working conditions, price changes, and productivity.

Price Increase

The rise in the cost of goods or services in the market.