a.

Assuming your new laptop will last 3 years, you decide to set up a replacement fund by making quarterly payments of $150 in an account at a local credit union. The account earns 6 percent nominal annual interest, compounded monthly. If you make the first payment immediately, how much money will you have saved by the end of the third year?

b. Find the NPV of 10 biannual payments of $1000 over 5 years at 5% nominal interest, compounded annually. The first payment will occur 6 months from now.