1- A company currently owes $15,000 to a bank for a loan it took 2 years and 6 months ago. The interest rate charged on the loan was 3.5% compounded monthly.

a. What was the original principal of the loan?

b. What was the amount of interest charged on the loan?

2- If you want to have a million dollars 40 years from today, how much should you invest in your savings account that earns interest of 5.06% compounded monthly?

3- Calculate the future value of each of the following investments.

Present Value Nominal Interest Rate Compounding Frequency Number of Compounding Periods Future Value

$25,800 4.50% Annually 12 ?

$30,500 1.75% Semi-annually 24 ?

$15,000 5.50% Quarterly 36 ?

$41,250 3.50% Monthly 48 ?