ABC Bank Offers a Return of 9% on a Savings

Multiple Choice

ABC Bank offers a return of 9% on a savings account for five years using simple interest while XYZ Bank offers a return of 9% for five years using compound interest.An investor should choose

A) the simple interest option because both have the same basic interest rate.
B) the compound interest option because it provides a higher overall return.
C) the compound interest option only if interest is compounded monthly.
D) the simple interest option only if interest is compounded monthly.
E) the compound interest option because both have the same basic interest rate.