Which of the following bank accounts has the lowest effective annual return? Group of answer choices 1. An account that pays 8% nominal interest with monthly compounding. 2. An account that pays 8% nominal interest with daily (365-day) compounding. 3. An account that pays 7% nominal interest with monthly compounding. 4. An account that pays 8% nominal interest with annual compounding. 5. An account that pays 7% nominal interest with daily (365-day) compounding.

Which of the following bank accounts has the lowest effective annual return? Group of answer choices 1. An account that pays 8% nominal interest with monthly compounding. 2. An account that pays 8% nominal interest with daily (365-day) compounding. 3. An account that pays 7% nominal interest with monthly compounding. 4. An account that pays 8% nominal interest with annual compounding. 5. An account that pays 7% nominal interest with daily (365-day) compounding.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 3STP

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