1. An advertisement reads like this. Gives us 10,000 a year(starting next year) for the next 10 years and we will give 10,000 a year (starting with the end of year 11) forever.

a). Suppose that the market rate of interest is 6% per year, is this a fair deal?

b). approximately at what rate of interest this will be a fair deal?

2.At 7% interest per year compounded semi-annually, how many years will it take to double your money? what is the effective rate of return?