1.What is the effective interest rate corresponding to a nominal annual rate of:

a) 9% compounded semi-annually?

b) 9% compounded quarterly?

c) 9% compounded monthly?

2. If $3000 is placed in an account at 5% and is compounded quarterly for 5 years. How

much is in the account at the end of 5 years?

3.Which of the ff nominal interest rates has the highest effective rate: 12% compounded

annually, 11.9% compounded semi-annually, 11.8% compounded quarterly, or 11.7%

compounded monthly?

4. Which interest rate would you prefer to pay on a loan: 9% compounded monthly, 9.1%

compounded quarterly, 9.2% compounded semi-annually or 9.3% compounded annually?