Answer
$9 \% \text{ compounded monthly}$
Work Step by Step
The rate with the highest effective rate of interest represents the better deal
For $r_1 = 9\%=0.09$, $\text{Compounded monthly} \to n_1 = 12$:
$r_{e_1} = \left(1+\dfrac{r_1}{n_1} \right)^{n_1} - 1$
$r_{e_1} = \left(1+\dfrac{0.09}{12} \right)^{12} - 1$
$r_{e_1} \approx 0.09381$
For $r_2 = 8.8\%=0.088$, $\text{Compounded daily} \to n_2 = 365$:
$r_{e_2} = \left(1+\dfrac{r_2}{n_2} \right)^{n_2} - 1$
$r_{e_2} = \left(1+\dfrac{0.088}{365} \right)^{365} - 1$
$r_{e_2} \approx 0.09198$
Since $r_{e_1} > r_{e_2}$, then $9\%$ compounded monthly is the better deal.
