I can invest in a Certificate of Deposit at Bank of Veronica that will pay me 5.0%, compounded annually. Watch-Over-Ya Trust offers a daily compounded certificate that pays 4.95%. Which investment should I choose? AND WHY? I should invest in Bank of Veronica, since 5.0% is more than 4.95%. I should invest in Watch-Over-Ya, because the Effective Annual Return for Watch- Over-Ya is greater I should invest in Bank of Veronica, because the Effective Annual Return for Bank of Veronica is greater I should invest in Bank of Veronica, because after a year, I will have more in my Bank of Veronica account than if I invest in Watch-Over-Ya. It makes no difference, since after a year, I will have exactly the same whichever account I choose