(pls use excel functions to support answers thx!!)

1.What will be your annual cost, if you have an average cash balance is $1,000, and you will withdraw $500 every 7th day, nominal interest rate is 3%, opportunity cost is 15%, and probability of loss is 5%.

2.Suppose the money-demand equation is:

MD= P * [(0.125* Y) (75*i )

a. Initially, the data is given at: P=2; Y=8,000, and i =6. Determine the MD

b. If Y falls to 7,600 and price level does not change, what will be the new MD. How much is the change in the money supply, did it increase or decrease?