You are expected to read the text book, discuss with your classmates and answer the following questions. Please Note: Copy and paste from website or AI tools will be detected and you will not be given another chance for re-submission. Use your own words and cite properly.

1. What distinguishes APR (Annual Percentage Rate) from EAR (Effective Annual Rate)? How do these concepts find practical applications in your everyday life? Engage in a discussion with your classmates and share your discussion results here. Please include a relevant example of the transformation between APR (Annual Percentage Rate) and EAR (Effective Annual Rate).Be concise and limit your response to a maximum of 300 words.

2. Imagine you are going to a bank to do a term deposit for 5 years. This money is for your house purchase in five years time. You are trying to shop around in order to find the best return for your money. You have $100,000 to play around. Use a financial calculator to solve the following 3 questions. Please document your calculation process step by step (eg. I deposit $100, so PV = -100, I receive $500 in the end, so FV = 500).

(1) Bank A quotes you a rate of 5.9% APR and it is compounding annually. What is the Future Value in year 5?

(2) Bank B quotes you a rate of 5.85% APR and it is compounding semi-annually. What is the Future Value in year 5?

(3) Which one you would pick assuming your goal is to maximize your return?