1.

An investment has the option of daily compounding, monthly compounding, quarterly compounding, or annual compounding. If the future value of the investment is fixed, the present value of this investment will be lowest when the investment is compounded _____.

	a.	daily
	b.	annually
	c.	monthly
	d.	quarterly

2.

Joe invested $12,000 in a mutual fund six years ago. The investment is worth $25,000 today. If the interest was compounded annually, what is the annual rate of return earned on the investment?

	a.	13.01%
	b.	13.31%
	c.	12.67%
	d.	11.56%
	e.	12.01%