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Question 1. What amount, 11⁄2 years from now, is equivalent to $7000 due in 8 years if money

can earn 6.2% compounded semiannually? 


Question 2. By calculating the maturity value of $100 invested for 1 year at each rate, determine which rate of return an investor would prefer.                                                                

a) 12.0% compounded monthly.

b) 12.1% compounded quarterly.

c) 12.2% compounded semiannually.

d) 12.3% compounded annually.


Question 3. An $1100 investment earning 6.3% compounded annually grew to $4483.92.

What was the term of the investment?       


Question 4. A contract requires end-of-month payments of $175 for another 81⁄4 years. What would an investor pay to purchase this contract if she requires a rate of return of 3% compounded monthly

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