Your friend deposits $10,000 in an account today in hope that it grows to $14,250 in 5 years.What annual compounded rate would she need to earn?

(B) Suppose your friend then realizes she can expect to earn 9% APR compounded monthly in another investment vehicle.If she earns interest at that rate, how manyyearswould it take to realize the above $14,250 goal?

2.Next month, your friend plans to deposit $1,000 into an account expected to earn 12% APR compounded monthly.After the first $1,000 deposit, she will constantly grow the deposit by 0.5% each month.Given the above plan, how much will she have saved in 4 years?

3.(A) What is the yield to maturity on a corporate bond given the following information:

• bond matures in 20 years
• coupon rate = 8% APR compounded semi-annually, paid semi-annually
• face value = $1000
• bond price = $882.91

(B) In our class, we discussed two types of risks faced by bondholders.What are these two risks, and how could bond investors lower or eliminate each type of risk?