Answer:
8% compounded monthly has higher yield
Step-by-step explanation:
Here, we want to compare which of the two options would give a higher yield
An interest rate of 8% compounded monthly or 8% compounded annually
Let us say we are looking at a time frame of two years
If compounded monthly, since there are 12 months in a year, there would have been a compounding of 12 * 2 = 24 times
While if it is annual, we would have only twice
The higher the number of times we compound, the more the return
