Jason Spector has shopped around for the best interest rates for his investment of $10,000 over the next year. He has found the following:
Stated Rate ... Compounding
6.10% ...... Annual
5.90% ....... Semiannual
5.85% ....... Monthly
a. Which investment offers Jason the highest effective rate of return?
b. Now, assume that Jason wishes to invest his money for only six months and the annual compounded rate of 6.10 percent is not available. Which of the remaining investments should Jason choose?