1. Which of the following investment has the highest effective annual rate ( EAR)? a. An investment that pays 8 percent interest compounded daily b.  An investment that pays 8 percent interest compounded monthly  c. . An investment that pays 8 percent interest compounded semiannually  d. . An investment that pays 8 percent interest compounded annually  2. You want $20,000 in 5 years to take your spouse on a second honeymoon. Your investment account earns 7% compounded semiannually. How much money must you put in the investment account today. ( round to the nearest $1) a. $15,985 b. $14,178 c. $ 12,367 d. $13,349 3. APR and EAR will be the same  a. If the interest rate is daily compounding  b. If the interest rate is monthly compounding  c. . If the interest rate is quarterly compounding  d.  If the interest rate is annual compounding

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