problems 3

3. Many academic institutions offer a sabbatical policy. Every seven years a professor is given a year free of teaching and other administrative responsibilities at full pay. For a professor earning $100,000 per year who works for a total of 42 years, what is the present value of the amount she will earn while on sabbatical if the interest rate is 6% (EAR)? 4. You have found three investment choices for a one-year deposit: 9% APR compounded monthlv. 10% APR compounded annually, and 8% APR compounded daily. Compute the