1.

A friend asks to borrow $57 from you and in return will pay you $60 in one year. If your bank is offering a 6% interest rate on deposits and loans:

(a) How much (in $) would you have in one year if you deposited the $57 instead? (Round your answer to the nearest cent.)

(b) How much money (in $) could you borrow today if you pay the bank $60 in one year? (Round your answer to the nearest cent.)

(c) Should you loan the money to your friend or deposit it in the bank? (Consider the situation from a purely financial point of view.)

You should deposit the money in the bank or lend the money to your friend because it brings you more or less money at the end of the year. 1.2

Your grandfather put some money in an account for you on the day you were born. You are now 18 years old and are allowed to withdraw the money for the first time. The account currently has $7,075.68 in it and pays a 9% interest rate.

(a) How much money (in $) would be in the account if you left the money there until your twenty-fifth birthday? What if you left the money until your sixty-fifth birthday? (Round your answers to the nearest cent.)

twenty-fifth birthday: sixty-fifth birthday:

(b) How much money (in $) did your grandfather originally put in the account? (Round your answer to the nearest cent.)