12. Assuming a discount rate of 6% p.a., the present value of $1000 to be received exactly ten years from today is __________.

a. $551.82

b. $558.39

c. $568.27

d. $553.68

e. None of the answers listed above is within $0.10 of the correct answer.

13. Assuming a discount rate of 6% p.a., but with monthly compounding, the present value of $1000 to be received exactly ten years from today is __________.

a. $551.82

b. $558.39

c. $568.27

d. $553.68

a. None of the answers listed above is within $0.10 of the correct answer.

14. In which case will an investor receive the most interest (i.e., which of the following rates has the largest effective annual return)?

a. 4.14% p.a., compounded semiannually.

b. 4.12% p.a., compounded every 2 months (i.e., 6 times per year).

c. 4.09% p.a., compounded monthly.

d. 4.05% p.a., compounded daily (assume 365 days per year).

e. 4.00% p.a., compounded continuously.

f. There is not enough information provided to correctly answer this question.

15. In which case will an investor receive the most interest:

a. 16.14% p.a., compounded semiannually.

b. 16.12% p.a., compounded every 2 months (i.e., 6 times per year).

c. 16.09% p.a., compounded monthly.

d. 16.05% p.a., compounded daily (assume 365 days per year).

e. 16.00% p.a., compounded continuously.

f. There is not enough information provided to correctly answer this question