You are interested in investing your money in a bank account. Which of the following banks provides you with the highest effective rate of interest?

a. Bank 1; 8 percent with monthly compounding.

b. Bank 2; 8 percent with annual compounding.

c. Bank 3; 8 percent with quarterly compounding.

d. Bank 4; 8 percent with daily (365-day) compounding.

e. Bank 5; 7.8 percent with annual compounding.