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II Calculation Question: (70 points) Note: (Spell out all the calculation steps; otherwise some points will be deducted) 1. Mr. Smith is considering investing in

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II Calculation Question: (70 points) Note: (Spell out all the calculation steps; otherwise some points will be deducted) 1. Mr. Smith is considering investing in a retirement fund. The fund offers him $5,000 per year for 5 years and his will get his first payment next year. Suppose the interest rate is 12%, how much money Mr. Smith has to invest today? (14 points) 2. Would you prefer a savings account that paid 7% interest, compounded quarterly, over an account that paid 7.5% with annual compounding if you had $1,000 to deposit? Would the answer change if you had $100,000 to deposit? (14 points)

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