Lisa Smith, the treasurer of Bank AAA, has $100 million to invest for one year. She has identified three alternative one-year certificates of deposit (CDs), with different compounding periods and annual rates. CD1: monthly, 7.82%; CD2: quarterly, 8.00%; CD3: semiannually, 8.05%; and CD4: continuous, 7.95%. Which CD has the highest effective annual rate (EAR)?
A. CD1
B. CD2
C. CD3
D. CD4