(10 points) BoxCo is hiring a new employee named Fred, to whom they will pay a salary of $6000 per month, at the end of each month worked. Fred starts working on Jan 1, 2021. To finance Fred's salary, BoxCo deposits a lump sum of money into a bank account on Jan 1, 2021 that accumulates interest at a rate of 12% per year, compounded continuously. (a) What is the effective annual interest rate for BoxCo's bank account? Express your answer as a percentage and round to the nearest hundredth of a percent. Answer: The effective annual interest rate is %. (b) How much does BoxCo need to invest today to ensure that they can keep paying Fred's salary for a total of 10 years? (Assume that his salary remains constant during this time period.) Show your reasoning carefully. Round your final answer to the nearest cent. Answer: BoxCo must invest dollars today. (c) When negotiating his contract, Fred asks if BoxCo would consider raising his salary by $5 each month, so that he would make $6 000 this month, $6005 next month, $6010 the month after that, and so on. How much additional money would BoxCo need to deposit into their account today in order to accommodate these raises? Colour in the circle for ALL correct answers. 119 119 120 o 5je -0.01(3+1) o 5(j 1)e-0.01 ; 120 O j=1 5je -0.01(+1) o 513 1)e-0.01 ; j=0 j=0 j=1 O None of the above (10 points) BoxCo is hiring a new employee named Fred, to whom they will pay a salary of $6000 per month, at the end of each month worked. Fred starts working on Jan 1, 2021. To finance Fred's salary, BoxCo deposits a lump sum of money into a bank account on Jan 1, 2021 that accumulates interest at a rate of 12% per year, compounded continuously. (a) What is the effective annual interest rate for BoxCo's bank account? Express your answer as a percentage and round to the nearest hundredth of a percent. Answer: The effective annual interest rate is %. (b) How much does BoxCo need to invest today to ensure that they can keep paying Fred's salary for a total of 10 years? (Assume that his salary remains constant during this time period.) Show your reasoning carefully. Round your final answer to the nearest cent. Answer: BoxCo must invest dollars today. (c) When negotiating his contract, Fred asks if BoxCo would consider raising his salary by $5 each month, so that he would make $6 000 this month, $6005 next month, $6010 the month after that, and so on. How much additional money would BoxCo need to deposit into their account today in order to accommodate these raises? Colour in the circle for ALL correct answers. 119 119 120 o 5je -0.01(3+1) o 5(j 1)e-0.01 ; 120 O j=1 5je -0.01(+1) o 513 1)e-0.01 ; j=0 j=0 j=1 O None of the above
