Question 1: answer the following:

a) The Continental Bank advertises capital savings at 5.4% compounded annually while TD Canada Trust offers premium savings at 5.2 % compounded monthly. Suppose you have $1500 to invest for two years.

(i) Which deposit will earn more interest?

(ii) What is the difference in the amount of interest?

(Round to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

b) A loan of $2100 is due in 7 years. If money is worth 4.3% compounded annually, find the equivalent payments that would settle the debt at the times shown below.

(i) now

(ii) in 2 years

(iii) in 7 years

(iv) in 12 years

(Round to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

c) Two debts, the first of $500 due six months ago and the second of $1800 borrowed one year ago for a term of four years at 8.8% compounded annually, are to be replaced by a single payment one year from now. Determine the size of the replacement payment if interest is 9.7% compounded quarterly and the focal date is one year from now.

(Round to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

d) How long will it take $1620 to accumulate to $1884 at 9% p.a. compounded monthly? State your answer in years and months (from 0 to 11 months).

The investment will take __ year(s) and __ month(s) to mature.