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Suppose there are two banks: Bank A pays you 3.5% p.a. interest compounded monthly. Bank B pays you 3.8% p.a. interest compounded quarterly. Which bank

Suppose there are two banks: Bank A pays you 3.5% p.a. interest compounded monthly. Bank B pays you 3.8% p.a. interest compounded quarterly. Which bank offers the best return on your money, i.e. which bank offers the highest EAR?

A. Not Applicable

B. Both Bank A and Bank B are comparable

C. Bank B

D. Bank A

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