You lend $100,000. Assume interest is compounded annually. What are the proceeds if:

a)You lend for 2 years at 5%

b) You lend for 1 year at 5%, receive your proceeds, and then roll over the proceeds at 5% for the next year

c) You lend for 1 year at 5%, receive your proceeds, and then roll over the proceeds at 6% for the next year

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\"Rollover\" To review what was mentioned in class: A rollover investment refers to an investment for an initial period, the proceed from which are then re-invested for a similar period at an interest rate not known at the outset. For example, you might have a 2-year investment period and you invest for two years at 4%. That means you have at the outset fixed a rate of 4% for each year. Alternatively, you invest for one year at 3.5%. You do not know the rate you will receive for the second year until the first year is over. At that point, you reinvest the proceeds from the first year - you roll it over - at whatever rate the market presents to you for the second year. QUESTIONS: You lend $100,000. Assume interest is compounded annually. What are the proceeds if: a) You lend for 2 years at 5% b) You lend for 1 year at 5%, receive your proceeds, and then \"roll over\" the proceeds at 5% for the next year c) You lend for 1 year at 5%, receive your proceeds, and then \"roll over\" the proceeds at 6% for the next year