Question 3. Debt payments of $2600 due one year ago and $2400 due two years from now are to be replaced by two equal payments due one year from now and four years from now. What is the size of the equal payments? Use one year from now as focal date. (a) Draw a cash flow diagram. Answer: (b) Find the size of the equal payments if money is worth 9.6% p.a. compounded semi-annually? Answer: Question 6. Five years ago you opened 8 savings account with an initial deposit of $2,500. One month after opening the account you made your first deposit of $300 and continued depositing $300 each month for 5 years. Three years ago you withdrew $2.700 from your savings account to pay your tuition. You earned 3.25% compounded monthly over the 5 years. (a) How much do you have accumulated in your savings account today? Answer: (b) How much interest did you earn over the 5 years