1a.) Last year Rocco Corporation's sales were $225 million. If sales grow at 7.04% per year, how large (in millions) will they be 5 years later?

$271.74

$286.05

$301.10

$316.16

$331.96

b. Your aunt is about to retire, and she wants to sell some of her stock and buy an annuity that will provide her with income of $50,000 per year for 30 years, beginning a year from today. The going rate on such annuities is 6.2927%. How much would it cost her to buy such an annuity today?

$574,924

$605,183

$635,442

$667,214

$700,575

c. Farmers Bank offers to lend you $50,000 at a nominal rate of 5.0%, simple interest, with interest paid quarterly. Merchants Bank offers to lend you the $50,000, but it will charge 6.0%, simple interest, with interest paid at the end of the year. What's the difference in the effective annual rates charged by the two banks?

1.56%

1.30%

1.09%

0.91%

0.72%