Would a Depositor Prefer an APR of 8% with Monthly

question 29

Multiple Choice

Would a depositor prefer an APR of 8% with monthly compounding or an APR of 8.5% with semiannual compounding?

• A) 8.0% with monthly compounding
• B) 8.5% with semiannual compounding
• C) The depositor would be indifferent.
• D) The time period must be known to select the preferred account.

---

Definitions:

Compulsive Behavior

Actions performed persistently and repetitively without necessarily leading to an actual reward or pleasure, often associated with psychological disorders such as OCD.

Extinguishes Anxiety

A process or method that effectively reduces or eliminates feelings of anxiety.

Obsession

Persistent, intrusive, and unwanted thoughts or urges that cause distress or anxiety, often seen in obsessive-compulsive disorder.

Biological Theories

Explanations in psychology that attribute complex phenomena such as personality, behavior, and mental disorders to biological factors like genetic, neurological, or evolutionary influences.