You are the financial planner for Johnson Controls. Assume last year's profits were $$880,000.$ The board of directors decided to forgo

dividends to stockholders and retire high$-$interest outstanding bonds that were issued $6$ years ago at a face value of $$1,490,000.$ You

have been asked to invest the profits in a bank. The board must know how much money you will need from the profits earned to retire

the bonds in $8$ years. Bank A pays $6\%$ compounded quarterly, and Bank B pays $7\%$ compounded annually. $($Use Table $1$ and Table $2$

provided.$)$

Note: Do not round intermediate calculations. Round your answers to the nearest dollar amount.

a$-1.$ Which bank would you recommend?

Bank A

Bank B

a$-2.$ How much of the company's profit should be placed in the bank?

Profit

b$.$ If you recommended that the remaining money not be distributed to stockholders but be placed in Bank B$,$ how much would the

remaining money be worth in $8$ years?

Future Value