If you could choose any of the following interest rates for your investment which would you choose to give you the highest return?
A)15% compounded annually
B)14% compounded semi-annually
C)14% compounded quarterly
D)14% compounded monthly

Question

Quizplus · Accepted Answer

15% compounded annually provides the highest return because the nominal rate is higher than the other options, and compounding frequency does not compensate for the lower nominal rates in options B, C, and D.

If You Could Choose Any of the Following Interest Rates