1. You just searched internet and found the best bank C.D. account. The term is 6% APR with quarterly compounding. If you deposit $3,000 in the account in 2017, what will be your account balance in 2027 if there is no withdraw or deposit during the period?
2. How much do you have to save today (one time) at 8% APR compounded semi-annually in order to have $35,000 available for the purchase of a car five years from now?
3. The one year C.D. offer 5% APR and the one-year ahead forward rate is 2%. Based on the expectation theory, what would be the annual interest rate on the two year C.D.?