You plan to invest some money in a bank account. Which of the following banks provides you with the highest effective rate of interest?

A. Bank 1; 6.1% with annual compounding.
B. Bank 2; 6.0% with monthly compounding.
C. Bank 3; 6.0% with annual compounding.
D. Bank 4; 6.0% with quarterly compounding.
E. Bank 5; 6.0% with daily (365-day) compounding.


Answer: E

Business

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