1. EncryptCo would like to establish a fund for purchasing machinery for health institutions that serve people with physical injuries. The fund will be set up to last in perpetuity so that EncryptCo can budget annually for machine purchases. The fund will pay out $2, at the end of each year starting in 2D25. {Complete the following calculations. [a] If interest is at 3.25% nominal annual compounded quarterly, calculate the amount of money that EncryptCo needs to put into the fund at the beginning of 2022. [2 marks} [bi If interest is at 5% nominal annual compounded quarterly, calculate the amount of money that EncryptCo needs to put into the fund at the beginning of 222. [2 marks] 2. MarineEo has purchased some equipment that will allow its offshore operations to grow in savings for 5 years starting at the end of 2D2l5. It is now the beginning of 2022. The equipment will enable sayings of $4, at the end of 2025, and the savings will increase each year by 5% from the previous year until the end of the year 203D. Calculate the present value of the equipment at the beginning of 2022 if the interest rate is 4% nominal annuals compounded quarterly. [4 marks} 3. GemCo has found two machines that it can used at its mines but it can only purse one of them. Each machine is identied by number PDJDl and F'Dl2. The data for each machine are given in the table below. Pooiooz 536.000 PTDlectLife summers-unreal 53m Salvage 1v'alue $225D 55DGD [a] Draw a cash flow diagram of each machine. {3 marks] [bi If the interest rate is 3% nominal annual compounded monthly nd the present worth of each project and select a project based on the present worth. {4 marks} 4. A bond with a face value of Sd pays annual interest of 3.5% at the end of each year for 1|] years. Eight pawnents are left until the bond matures with the first payment being today. [a] Draw a cash flow diagram of the bond and draw a vertical line that represents today on tine cash ow diagram. {3 marks} [bl How much would you pay for the bond today if you wanted to earn 4% annual interest compounded annually? [5 marks]