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Question
Which of the following bank accounts has the lowest effective annual return?a. An account that pays 8% nominal interest with daily (365-day) compounding.
b. An account that pays 8% nominal interest with monthly compounding.
c. An account that pays 8% nominal interest with annual compounding.
d. An account that pays 7% nominal interest with daily (365-day) compounding.
e. An account that pays 7% nominal interest with monthly compounding.
Answer
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