Which of These Savings Rates Is Most Favorable

question 18

Multiple Choice

Which of these savings rates is most favorable?

• A) 6% compounded annually
• B) 5.8% compounded monthly
• C) 5.9% compounded quarterly
• D) 5.8% continuously compounded

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Definitions:

Survivor Bias

The analytical error of focusing on the surviving subjects of a study or process and overlooking those that did not survive due to lack of visibility.

Broad Sample

A wide-ranging or extensive group of people or items selected from a population, used for research or statistical analysis.

Survivor Bias

A logical error that involves focusing on the people or things that survived some process and inadvertently overlooking those that did not because of their lack of visibility.

Financially Successful

A state or condition of having significant income, profit, or assets, exceeding financial liabilities and obligations.