Answer:
We will pick the highest rate, which is 18% annually
effective rate of 0.04% compounded daily: 15.72%
Explanation:
we will calculate the equivalent rate for each alternative:
daily: 0.040%
[tex](1+ r)^{time} = 1+ r_e[/tex]
time 365.00 (365 days per year)
rate 0.040% = 0.04/100 = 0.00040
[tex]1 \: (1+ 0.0004)^{365} = 1 + r_e[/tex]
effective: 0.1572 = 15.72%
weekly 0.285
there are 52 week per year
[tex]1 \: (1+ 0.00285)^{52} = 1 + r_e[/tex]
effective rate: 0.15950 = 15.95%
monthly 1.35%
12 months per year
[tex]1 \: (1+ 0.0135)^{12} = 1 + r_e[/tex]
effective rate = 0.17459 = 17.46%
quarterly: 3.5%
four quarter per year
[tex]1 \: (1+ 0.035)^{4} = 1 + r_e[/tex]
effective rate = 0.14752 = 14.75%
semiannually 8.5%
dos half
[tex]1 \: (1+ 0.085)^{2} = 1 + r_e[/tex]
effective rate = 0.17723 = 17.72%
annual of 18%
We will pick the highest rate, which is 18% annually
