4. Your parents set aside some education fund of $5,125.00when you were a kid; the fund has now grown into $11,787.50. Assuming the average rate of investment for this fund is 7.00%. How long ago did your parents setup this fund?( Round your answers to two decimals , for example, if your answer is 5.126, round to 5.13.)

5. Consider an investment of 2,214.00 invested for 15 years at a simple annual rate of 6.00%. How much MORE can you make on this investment if the interest rate had coumpounded annually ? Keep answers to two decimals, such as 1234.86

6.

A bank is considering to offer two different loans which costs the same equivalent interest rate of 10%:

1) One compounds on a quarterly basis.

2) The account compounds on a monthly basis.

This 10% interest rate is called as _________

		annual percentage rate
		effective annual rate
		discount rate

7.

What type of loan is this?

If you borrow $20,000 today, and you pay back $1,000 interest payment a year for the next three years, and then $20,000 three years later.

This is called a(n) ________ loan.

		amortized
		interest-only
		pure discount