1a.) Suppose Community Bank offers to lend you $10,000 for one year at a nominal annual rate of 8.804%, but you must make interest payments at the end of each quarter and then pay off the $10,000 principal amount at the end of the year. What is the effective annual rate on the loan?

8.24%

8.45%

8.66%

8.88%

9.10%

b. Suppose a U.S. treasury bond will pay $2,500 five years from now. If the going interest rate on 5-year treasury bonds is 3.2377%, how much is the bond worth today?

$1,928.78

$2,030.30

$2,131.81

$2,238.40

$2,350.32

c. Your father's employer was just acquired, and he was given a severance payment of $382,173, which he invested at a 7.5% annual rate. He now plans to retire, and he wants to withdraw $35,000 at the end of each year, starting at the end of this year. How many years will it take to exhaust his funds, i.e., run the account down to zero?

22.50

23.63

24.81

26.05

27.35