Question - Using the appropriate interest factor table, answer each of the following questions (each case is independent of each other.)
1. Your company purchases a 5-year certificate of deposit which pays semi-annually and has a stated interest rate of 8 percent. The initial investment is $5,000. What is the future amount of your investment worth at the end of 5 years?
2. What amount must you put in the bank today if you will need $10,000 in 8 years for the cost of your child's college education? The bank will provide you with interest payments quarterly on your investment. The annual rate of interest you have been quoted is 12 percent.