2. What is the present value of the following uneven cash flow stream? The appropriate interest rate is 5.6%, compounded annually. Note that the final cash flow represents a project where there may be reclamation or other end of project costs which are greater than any final income and/or salvage value.

3. What annual interest rate will cause $2,750 to grow to $4,200 in 5 years, assuming annual compounding? Show your answer to 2 decimals (x.xx%)

4. Will the future value be larger or smaller if we compound an initial amount more often than annuallyfor example, every 6 months, or semiannually holding the stated interest rate constant? Explain your answer.

5. a) What is the future value of $2,750 after six years under 5.6% semiannual compounding

9b) What is the effective annual rate for 5.6% interest with semiannual compounding? Be sure to show your EAR answer to 2 decimals, that is xx.xx%

9c) What is the future value of $2,750 after six years under 5.6% quarterly compounding?

9d) What is the effective annual rate (EAR) for 5.6% interest with quarterly compounding?

9e) Explain how the effective annual rate changes based on the number of compounding periods per year.

9f) What is the future value of $2,750 after six years under 5.6% daily compounding? Assume 365 day years and do not do any interim rounding.

9g) What is the effective annual rate for 5.6% (APR) interest with daily compounding?

6. Will the effective annual rate ever be equal to the simple (quoted) rate? Explain.