You as a Chartered Wealth Manager have been approached by a client who is depositing some amount in an account that pays a ROI of 12% p.a compounded monthly. She also has an option of investing in another account that pays ROI 12.76% p.a. compounded annually. She wants to know which of these is a better choice.

You as a Chartered Wealth Manager have been approached by a client who is depositing some amount in an account that pays a ROI of 12% p.a compounded monthly. She also has an option of investing in another account that pays ROI 12.76% p.a. compounded annually. She wants to know which of these is a better choice.

A. 12% P.A compounded monthly is better

B. 12.76% P.A. Compounded Annually is better

C. 12.76% P.A. is better by .0775 %

D. 12% P.A compounded monthly is better by .0775%

View Answer

Answer: C