1. Jim makes a deposit of 12,000 in a bank account. The deposit is to earn interested compounded annually at a rate of 6 percent per year for 7 years.

1. How much will have on deposit at the end of 7 years?
2. Assuming the deposit earned a 9% rate of interest compounded quarterly, how much would he have at the end of 7 years?
3. In comparing (a) and (b), what are the respective effective annual yields? Which alternative is better?