We will have the following:
*First: We will solve for the first scenario:
[tex]r=(1+\frac{0.0502}{2})^2-1\Rightarrow r\approx0.05083001\ldots[/tex][tex]\Rightarrow r\approx0.05[/tex]
We will solve for the second scenario:
[tex]r=(1+\frac{0.0495}{4})^4-1\Rightarrow r\approx0.0542644766\ldots[/tex][tex]\Rightarrow r\approx0.05[/tex]
From these rates we can see that (If rounded) both rates will be equivalent, but the sligthly better one (If not rounded) would be the second option of compounding.
