You Can Deposit Your Savings at Vegetable Bank, Which Offers

Multiple Choice

You can deposit your savings at Vegetable Bank, which offers to pay 12.6 percent interest compounded monthly, or at Fruit Bank, which will pay interest of 11.5 percent compounded daily.(Assume 365 days in a year.) Which bank offers the higher effective annual rate?

A) Vegetable Bank.
B) Fruit Bank.
C) Both banks offer the same effective rate.
D) Cannot be determined from the information provided.
E) Workable only if the banks use the same compounding period.