16. Marty Marion is considering placing $30,000 in a three-year, default-free fixedincome investment that promises to provide interest at the rate of8% during the first year, 10% in the second year, and 12% in the third year. Coupon payments can be reinvested at the rate in effect for the following year.

a. Assuming annual compounding and repayment of principal at the end of the third year, to what value is Marty's investment expected to grow after th ree years?

b. Recalculate your answer to part

(a) assuming semiannual compounding.