1. A bank quotes you an interest rate of 16% per annum with quarterly compounding. What is the equivalent rate with (a) continuous compounding and (b) annual compounding? 2. An investor receives $110 in one year in return for an investment of $100 now. Calculate the percentage return per annum with a) annual compounding, b) semiannual compounding, c) monthly compounding and d) continuous compounding. 3. Suppose that zero interest rates with continuous compounding are as follows: Maturity(years) Rate (% per annum) 2.0 1 2 3.0 3 3.7 4 4.2 Calculate forward interest rates for the second, third, and fourth years