1. The AAA Co. invested $150,000 at 8 percent compounded annually for 5 years. How much interest on interest did the company earn over this period of time?
2. Consider a lottery that pays to the winner an annuity of $5000 that begins in one year and continues to be paid at the end of each year for 8 consecutive years with one exception -- the payment at the end of year 4 (and only in this year) is not $5000 but instead is $2500. Using an interest rate of 7.5%, determine the present value of this prize.
3. When considering purchasing a company's stock, where do you want to see their stock average return, standard deviation, and coefficient of variation?