Question

Anthony is deciding between different savings accounts at his bank. He has four options, based on how frequently interest compounds. Which should he choose if he wants the best rate of return on his interest?

A) Annual Compounding
B) Semi-Annual Compounding
C) Monthly Compounding
D) Daily Compounding

Answer 1

Answer: D) Daily Compounding

Explanation:To earn as much interest as possible, Anthony should open a savings account that earns compound interest and has the highest interest rate.

Daily compounding is compounded every day, hence Anthony will get the best rate of return on his interest with this.