1.You are considering two salary offers. The first one will pay you $80,000 a year for two years. The second one will pay you $60,000 a year for two years and an $35,000 additional bonus, paid today.

The salaries would be paid in a lump sum at the end of each year. If the interest rate is 5%, compounded monthly, which is the better offer?

2.Complete the gales in the following table

Normal # of compounding Rate per Equivalent

APR periods period annual rate

10.75% 52 0.207% ?

? 4 3.12% ?

12% 365 0.03287% ?