1)

Hui wanted to ensure that she had $80,000 for her child's university education. As soon as her child was born, she started saving $1,225 every 6 months in an investment fund. If she achieved her investment target on her child's 20th birthday, and she made no deposit on the child's 20th birthday, calculate the following:

a. The nominal interest rate for the investment, compounded quarterly.

%

Round to two decimal places.

b. Calculate the effective interest rate for this investment.

%

Round to two decimal places.

2)

Morgan made payments of $187.09 at the end of every month into a retirement fund which accumulated to $39,000 over 16 years.

a. At what interest rate compounded monthly was the fund growing? (Assume that the interest rate remained constant throughout the term.)

%

Round to two decimal places.

b. At what interest rate would she have been able to accumulate the same $39,000 in only 11 years?

%

Round to two decimal places.