1. Suppose you have $1000 and plan to purchase a 4-year certificate of deposit (CD) that pays 3% interest, compounded annually. How much will you have when the CD matures?
A. 1124.86
B. 1125.51
C. 885.29
D. 1360.49
2. Suppose a U.S. government bond promises to pay $2254.73 four years from now. If the going interest rate on 4-year government bonds is 5%, how much is the bond worth today?
A. 2147.36
B. 1766.64
C. 1854.97
D. 1853.22
E. 1540.01