1. Determine which is the better investment:

7.25%

compounded daily or

7.35%

compounded quarterly. Round your answers to

2

decimal places.

The 7.25% daily investment gives an effective rate of % . The 7.35% quarterly investment gives an effective rate of % . Therefore, the (Choose one) investment is a better investment.

2. In order to pay for college, the parents of a child invest

$15,000

in a bond that pays

4%

interest compounded semiannually. How much money will there be in

19

years? Round your answer to the nearest cent.

In 19 years the bond will be worth $ .

3. To pay for new machinery in

6

years, a company owner invests

$30,000

at

6.5%

compounded quarterly. How much money will be available in

6

years? Round your answer to the nearest cent.

In 6 years there will be $ available.