Question 1: Time value of money (5 marks)

(a) How much will a lump sum of $83,000 become after 9 years of compound interest at an annual rate of interest of 7.25% (2 marks)?

(b) What would the effective annual rate of interest be if the nominal annual rate remains at 7.25% but the compounding frequency changes to quarterly (2 marks)?

(c) What is the continuously compounded rate that is equivalent to the nominal annual interest rate of 7.25% per annum (1 mark)?

In excel please