You have $500 that you would like to invest. You have 2 choices: Savings account A which earns 8% compounded annually, or savings account B which earns 7.75% compounded semiannually. Which would you choose and why?

A because it has a higher effective annual rate.

A because the future value in one year is lower.

B because it has a higher effective annual rate.

B because the future value in one year is lower.

B because it has the higher quoted rate.