1. Suppose you were considering depositing your savings in one of three banks, all of which pay 5 percent interest; bank A compounds annually, bank B compounds semiannually, and bank C compounds daily. Which bank would you choose? Why?

2. Albert Pujols hit 47 home runs in 2009. If his home- run output grew at a rate of 12 percent per year, what would it have been over the following 5 years?

3. If you were offered $ 1,079.50 10 years from now in return for an investment of $ 500 currently, what annual rate of interest would you earn if you took the offer?

4. You lend a friend $ 10,000, for which your friend will repay you $ 27,027 at the end of 5 years. What interest rate are you charging your friend?

5. You are offered $ 1,000 today, $ 10,000 in 12 years, or $ 25,000 in 25 years. Assuming that you can earn 11 percent on your money, which should you choose?

6. To pay for your childs education, you wish to have accumulated $ 15,000 at the end of 15 years. To do this you plan on depositing an equal amount into the bank at the end of each year. If the bank is willing to pay 6 percent compounded annually, how much must you deposit each year to reach your goal?

7. In 10 years you are planning on retiring and buying a house in Oviedo, Florida. The house you are looking at currently costs $ 100,000 and is expected to increase in value each year at a rate of 5 percent. Assuming you can earn 10 percent annually on your investments, how much must you invest at the end of each of the next 10 years to be able to buy your dream home when you retire?