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Three Savings accounts are advertised. - One savings account offers an APR of 2.43% compounded daily - another one offers an APR of 2.46% compounded monthly - A third offers an APR of 2.47% compounded annually Which one pays the most interest at the end of the one-year explain how you know your answers right

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sqdancefan

Answer:

  2.46% monthly pays the most

Step-by-step explanation:

The formula for the effective annual rate of interest when nominal rate r is compounded n times per year is ...

  r' = (1 +r/n)^n -1

For 2.43% compounded daily, the effective annual rate is ...

  r' = (1 +0.0243/365)^365 -1 ≈ 2.4597%

For 2.46% compounded monthly, the effective annual rate is ...

  r' = (1 +0.0246/12)^12 -1 ≈ 2.4879%

For 2.47% compounded annually, the effective annual rate is ...

  r' = (1 +0.0247/1)^1 -1 = 2.47%

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The account with an APR of 2.46% compounded monthly pays the most interest. (2.49% > 2.47% > 2.46% ⇔ monthly > annually > daily)

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