1. (a) How much money will you have accumulated in your bank account if you put $3,000 in a CD today that earns 4% interest compounded annually for 10 years? (b) What if you could get semiannual compounding of interest on the CD in 1a) 2. (a) How much would you pay today for a zero coupon bond with a face value of $5,000 that yields 6% and matures in 15 years? With a zero coupon bond, you pay today Principal minus interest earned over the period, and receive the face amount at maturity. The Face amount Future ValueYou are discounting back to the PV in this problem. This is like us savings bonds or US Treasury bills b) How much interest did you earn over the 15 years? (c) Why are these an attractive investment to a spendthrift and also maybe to an investor who does not have quite as much money to invest? 3. (a) How much money would you have accumulated in a Roth IRA account if you put in $5,000 per year beginning one year from now [an ordinary annuity) and make this contribution for the next 30 years, assuming that you can get an 8% return on your money during that time? (b) What if you begin making the contributions today and at the beginning of every year for the next 30 years (annuity due)? Assume same amount of contribution and interest rate. (c) What is so wonderfull about a Roth IRA rather than a traditional IRA or a 401-K contribution? Hint: The tax break comes at different points