The R&M Bank Has Offered You the Choice Between Two $\bullet$

The R&M Bank has offered you the choice between two loans:
$\bullet$ #1 charges interest at a rate of 9% compounded quarterly.
$\bullet$ #2 charges interest at a rate of 9.50% compounded semi-annually.
Which loan do you prefer and why?

A) #1, lower effective rate
B) #2, lower effective rate
C) #1, higher effective rate
D) #2, higher effective rate