Part (a) Compute the amount that a $100,000 investment today would accumulate at 10% (compound interest) by the end of 6 years.

Part (b) Billy Smith has a $5,600 outstanding debt to his parents. He has only $1500 in his checking account. His parents tell him he may settle the account in one of two ways since he can't pay it all now:

1. Pay $1500 now and $4,600 when he is done with his studies (two years from today).

2. Pay $6,000 one year after completion of his studies, three years from today. Assuming that the cost of money is the only factor in Billy's decision and that the cost of money to him is 8%, which alternative should he choose? Your answer must be supported with calculations