Question 1 a) A company is due to receive a payment of 500,000 from a customer in 6 months' time. To smooth its cashflows, the company would prefer to receive the payment immediately, and has agreed to transfer its entitlement to this payment to a third party (a discount house) in return for an immediate payment calculated using a rate of commercial discount of 16% per annum. How much will the immediate payment made by the discount house be? b) An investor puts 5,000 in a savings account that pays 10% simple interest at the end of each year. Compare how much the investor would have after 6 years if the money was: Invested for 6 years ii. Invested for 3 years, then immediately reinvested for a further 3 years. c) 250 is invested in a savings account. The nominal rate of interest convertible monthly for the first 3 months is 18% and the nominal rate of interest convertible quarterly for the next 9 months is 20%. How much is in the account at the end of the year? d) Calculate the present value as at 1 March 2005 of a series of payments of 1,000 payable on the first day of each month from April 2005 to December 2005 inclusive, assuming a rate of interest of 6% pa convertible monthly. e) The force of interest is given by: (0.08 -0.001t0 St