For a given interest rate,r,which of the following expressions is smallest?
A)1 + r.
B)(1 + r/2)2.
C)(1 + r/12)12
D)(1 + r/365)365.

Name: For a given interest rate,r,which of the following expressions is smallest? A)1 + r. B)(1 + r/2)2. C)(1 + r/12)12 D)(1 + r/365)365.
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Question

Quizplus · Accepted Answer

The expression 1 + r is the smallest because it does not involve compounding, while the other expressions involve compounding interest at different intervals, which results in a slightly higher effective interest rate.

For a Given Interest Rate,r,which of the Following Expressions Is