Question 1
(10 points)

1. You decide to invest $15000 into a bank account that that is compounding its interest monthly. Assuming the bank is paying out an interest rate of the current prime rate – 1% (In the event that prime – 1% is less than 1%, use 1%), and the investment is for 5 years

a) How much money (total) do you have after the 5 years pass?

b) How much do you earn in interest over the 5 years?

Question 2
(10 points)

2. You wish to have $500,000 saved up in 30 years. Assuming that you can get an interest rate of prime + 5% on your investment (compounded quarterly.)

a)  How much do you need to invest today to have $500,000 30 years in the future?

b) How much of that total is interest?

Question 3
(10 points)

3. You borrow $50,000 at 5% interest (compounded daily).

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