Anthony is deciding between different savings accounts at his bank. He has four options, based on how frequently interest compounds. Which should he choose if he wants the best rate of return on his interest?

A. Annual Compounding

B. Semi - Annual Compounding

C. Monthly Compounding

D. Daily Compounding

The formula for calculating the compound interest:

I = (P * (1 + i) ^n) - P

where n is the number of compounding periods.

The number of compounding periods make a significant difference in interest.

The higher is the number of periods, the greater is the amount of compound interest.

Answer: D. Daily Compounding.