7. You lend $100,000 for one full year at 3.5%. What are your proceeds assuming: a) annual compounding b) monthly compounding, where each months rate is assumed to be compounded at the stated rate/12, regardless of the days in the month c) daily compounding, where each days interest is the stated rate/365 extra credit) continuous compounding; i.e., use the formula: Proceeds = ern where n is the number of years (in this case, 1) Notice the pattern of increases from a) to b) to c) to d). What can you conclude?

How to solve by hand?