You have recently been given an opportunity to lock-in a 1% monthly interest rate on a...

You have recently been given an opportunity to lock-in a 1% monthly interest rate on a savings account. Which of the following options will yield you the highest amount of interest on your 1% interest payments after 12 months?

A) Accumulate 1% a month as an annual percentage rate

B) Accumulate 1% a month as an annual percentage appreciation

C) Accumulate 1% a month as an annual percentage yield

D) Accumulate 1% a month as an annual percentage growth

Expert Solution

A) Accumulate 1% a month as an annual percentage rate

The effective rate will be highest in this case

( 1+ 1%)^12 -1

jeff jeffy answered 2 years ago

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You have recently been given an opportunity to lock-in a 1% monthly interest rate on a...

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