Question 1: Which one of the following statements concerning the annual percentage rate and effective annual rate is correct? (1 Point) The effective annual rate is lower than the annual percentage rate when an interest rate is compounded monthly The rate of interest you actually pay on a loan is called the annual percentage rate. The effective annual rate considers the effects of compounding. The effective annual rate equals the annual percentage rate when the rate on an account is designated as simple interest When firms advertise the annual percentage rate they are violating lending laws. Question 2: Suppose you just got a new job and are offered several contracts to choose from. Which is the best deal assuming a positive rate of interest? (1 Point) Payment of $10 million over ten years, paid in equal installments at the end of each year. Payment of $10 million over ten years, paid in equal installments at the beginning of each year. Payment of $10 million over ten years, paid in installments at the end of each year, but growing by 2% per year. Payment of $10 million over ten years, paid in installments at the beginning of each year, but growing by 2% per year. You should have no preference as it makes no difference. Question 3: Given a fixed stream of monthly income the: (1 Point) Present value will decrease as the time period decreases. Future value will increase as the interest rate decreases. Future value will increase if payments are made at the end of the period rather than the beginnning. Present value will decrease as the interest rate decreases. O Future value will decrease as the time period increases