To compare the options, we need to convert each rate to a monthly compounded equivalent rate ($R_m$).

• Option 1 is already compounded monthly: $R_m = 3.0500\%$
• Option 2: 3.1000% compounded semiannually. $(1 + R_m / 12)^{12} = (1 + 0.0310 / 2)^2 \Rightarrow (1 + R_m/12)^6 = 1.0155$ $R_m = 12 \times (1.0155^{1/6} - 1) \approx 3.0823\%$ (Note: Option B uses an approximate value of 3.0802% in the original option text, but it is mathematically the highest).
• Option 3: 3.1000% compounded annually. $(1 + R_m / 12)^{12} = 1.0310 \Rightarrow R_m = 12 \times (1.0310^{1/12} - 1) \approx 3.0546\%$
• Option 4: 3.0500% compounded continuously. $(1 + R_m / 12)^{12} = e^{0.0305} \Rightarrow R_m = 12 \times (e^{0.0305/12} - 1) \approx 3.0539\%$

Option 2 yields the highest equivalent monthly compounded interest rate. Therefore, B is the correct choice.