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Joy is taking out a car loan which she will pay back with interest. Which option will require her to pay the lowest amount in interest?

Aannual compounding
Bsemi-annual compounding
Cmonthly compounding
Ddaily compounding

Verified Answer :

johnkellock

A. annual compounding

The interest rate is lower as it is compounded annually 

Answer;
Annual compounding

Explanation; 
Annual compounding is a method of calculating and adding interest to an investment or loan once a year rather than for another period. 
This is done in compound interest, which is the interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or a loan. 
Using an annual compounding will prompt her to pay less interest compared to other periods.

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