Answer:
B) Annually
Explanation:
What does compounded mean?
Compounded means to calculate interest on the borrowed amount and on previous interest.
What does monthly mean?
Monthly means to be done one every month.
What does annually mean?
Annually means to be done yearly or every year.
What does semiannually mean?
Let's break this down. Semi means half or a partial of something. Annually, as we already discussed, means yearly or every year. Now, when we put it together, it creates half a year. So, semiannually means half a year.
What does quarterly mean?
We know a quarter, as in, the coin, is 25 cent. if we multiply 25 cents by four, we get a dollar. So a quarter coin is one fourth, or, a quarter of a dollar. Now, applying that to years, since a year is twelve months and a quarter is one fourth, we can divide twelve by four to get three. Three months is one quarter of a year.
With this in mind, twelve months is equal to a year. So, the interest is compounded every year.
A is incorrect because it says monthly. We have already figured out that the interest is compounded yearly, so it is incorrect.
B is correct because the definition of Annually is yearly or every twelve months.
C is incorrect because semiannually means half or part of a year, not a full year.
D is incorrect because quarterly means one fourth of a year, or, three months.