5 LIV Question 31 (5 points) a) Your investment advisor wishes to sell you a contract that pays equal $10,000 amounts at the end of each year for 20 years. If the anticipated earnings on the contract are an effective annual rate of 13%, what is the initial cost of the contract? b) If you wanted the contract to make inflation-adjusted annual payments after the first payment, and the anticipated rate of inflation over the next 20 years is 2% per annum, what would be the initial cost of this contract? Question 32 (5 points) Calculate the effective annual interest rate for each of the following: a) A credit card that charges 1.75% interest per month b) A6% residential mortgage where interest is compounded semi-annually c) First National Bank offers a 1-year Investment Certificate that pays 10% compounded annually. Second National Bank offers a 1-year Investment Certificate compounded semi-annually. What are the stated (nominal APR) and effective EARates that Second National Bank would have to offer to make its investment return the same as that of the First National Bank