Savings account A and savings account B both offer APRs of 6%, but savings account A compounds interest semiannually, while savings account B compounds interest quarterly. Which savings account offers the higher APY?

A. Savings account B, because it has more compounding periods per year
B. Savings account A, because it has more compounding periods per year
C. Savings account A, because it has fewer compounding periods per year
D. Savings account B, because it has fewer compounding periods per year

Question

Savings account A and savings account B both offer APRs of 6%, but savings account A compounds interest semiannually, while savings account B compounds interest quarterly. Which savings account offers the higher APY?

 		A.	Savings account B, because it has more compounding periods per year
 		B.	Savings account A, because it has more compounding periods per year
 		C.	Savings account A, because it has fewer compounding periods per year
 		D.	Savings account B, because it has fewer compounding periods per year

crashonce · Answer

I think its A but not sure, just using my general knowledge because once you compound the interes, it increases more if you do it more