You have a savings account where you keep the funds in for one year without adding to or withdrawing from the account. Which would you rather have: 0.040% compounded daily, 0.355% compounded weekly, 1.15% compounded monthly, 4.00% compounded quarterly, 7.5% compounded semiannually or a CAGR of 14%?

1. What is (EAR) for a daily compound rate of 0.040%? 

2. What is the (EAR) for a weekly compound rate of 0.355%?

3. What is the (EAR) for a monthly interest rate of 1.15%?

 4. What is the (EAR) of a 4.00% compounded quarterly rate?

5. What is the (EAR) for a 7.5% semi-annual compound? 

6. What is the (EAR) for an annual rate of 14%?

Answer rating: 100% (QA)

To compare the effective annual rates EAR for different compound rates we can use the formula EAR 1 ... View the full answer