Determine the better investment: 6% compounded monthly or 6.2% compounded semiannually
A) 6%, compounded monthly
B) 6.2% compounded semiannually

Question

Quizplus · Accepted Answer

The effective annual rate (EAR) for 6% compounded monthly is approximately 6.17%, while for 6.2% compounded semiannually, it is approximately 6.24%. Therefore, 6.2% compounded semiannually is the better investment.

Determine the Better Investment: 6% Compounded Monthly or 6