A bank is offering to sell three-month certificates of deposit for $9, 756. At the end of three months, the bank will pay $10,000 to the certificate owner. Based on a three-month interest period: What is the interest rate the bank is paying you? What are the nominal and effective interest rates on this certificate of deposit? A grandfather decided to put some money in the bank for her granddaughter's education the day she was born. The interest in the bank is 6% per year. The grandfather expects her granddaughter to withdraw $20,000.00 each year on her 18th, 19th, 20th and 21st birthday. What is the amount the grandfather needs to put in the bank? Consider two mutually exclusive alternative investments. The analysis period is 10 years and the MARR is 2%. Determine which investment is preferable by using incremental benefit-cost ratio analysis. You have deposited $5,000 in a bank for 3 years which pays an annual interest of 5%. At the end of each year you are withdrawing the interest earned. The average inflation during this period is 3%. Fill up the following table to determine after tax cash flow for this investment. Assume that you are in a 28% marginal tax bracket. Write down the equation for computing the inflation adjusted, after tax rate of return for this investment. Do not compute the actual rate of return