Assume JP Morgan has a choice between two deposit accounts.Account A has an annual percentage rate of 7.55 percent but with interest compounded monthly.Account B has an annual percentage rate of 7.45 percent with interest compounded continuouslyquarterly.Which account provides the highest effective annual return?
A)Account A
B)Account B
C)Both provide the same effective annual return.
D)We don't have sufficient information to make a choice.

Question

Quizplus · Accepted Answer

Account A has a higher effective annual return due to more frequent compounding (monthly) compared to Account B's continuous quarterly compounding.

Assume JP Morgan Has a Choice Between Two Deposit Accounts