Answer :
Answer:3.15 %
Step-by-step explanation:
Given
3.15 % compounded monthly
2.25 % quarterly
2.05 % daily
(a)A=P[tex] \left [ 1+\frac{r}{n}\right ]^{nt}[/tex]
A=P [tex]\left [ 1+\frac{0.0315}{12}\right ]^{12t}[/tex]
Suppose t= 1 year
A=1.031958 P
(b)A=[tex] \left [ 1+\frac{r}{n}\right ]^{nt} [/tex]
A=[tex]\left [ 1+\frac{0.025}{4}\right ]^{4t} [/tex]
A=1.022690 P
(iii)For 2.05 daily
A=[tex] \left [ 1+\frac{0.0205}{365}\right ]^{365t}[/tex]
For t=1 year
A=1.020709 P
thus Compound interest compounded monthly at 2.05% interest offers best deal as it sums up to least.