Problem 1: Calculate the annual effective interest rate for a nominal rate of 7%. p.a. compounding quarterly.
Problem 2: You have been offered an investment where if you pay $50,000 today you will receive $80,000 in 6 years. Calculate the rate of compound interest per annum that you would earn from this investment.
Problem 3: Calculate the size of the lump sum that you would have to deposit now to accumulate to $115,000 in five years' time (correct to the nearest cent). Your bank is paying interest of 9% per annum compounding monthly.