Related to Checkpoint 5

{Related to Checkpoint 5.?) (Calculating an EAR) Your grandmother asks for your help in choosing a certificate of deposit (CD) from a bank with a one—year
maturity and a fixed interest rate. The first certificate of deposit, CD #1, pays 3.95 percent APR compounded monthly, while the second certificate of deposit, CD #2,
pays 4.00 percent APR compounded semiannually. What is the efiective annual rate (the EAR) of each CD, and which CD do you recommend to your grandmother?

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