Answer:
Lowest effective interest rate
A 6.858%
B 6.883%
C 6.908%
D 6.933%
Explanation:
Effective rate is the rate of interest that actually earned or paid on any investment or on a loan. It also measure the compounding effect on the investment.
r = (1 + i/n)^n - 1
A
6.858% Annual
r = 6.858%
B
6.6571% Daily
Assuming 365 days
r = (1 + 6.6571%/365)^365 - 1 = 6.883%
C
6.7359% Quarterly
r = (1 + 6.7359%/4)^4 - 1 = 6.908%
D
6.722% Monthly
r = (1 + 6.722%/12)^12 - 1 = 6.933%
