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Michael has decided to invest his money in a bakery shop in Kitsilano. He invested $400,000 and he expects to earn 6% per annum, compounded

 Michael has decided to invest his money in a bakery shop in Kitsilano. He invested $400,000 and he expects to earn 6% per annum, compounded semi-annually, for 2 years. He will receive no cash flows during this period.

1. How much will Michael receive at the end of the term on this interest accrual loan, rounded to the nearest dollar?

2. If Michael receives $500,000 at the end of 2 years on this interest accrual loan, what rate of interest, expressed as an annual rate with monthly compounding will he earn?

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