1. For life insurance policies, some of the premium pays for the cost of the insurance, and the remainder goes toward the cash value of the policy and earns interest like a savings account. Suppose that, on the cash value of their policies, one insurance company pays 4.8% compounded monthly and another pays 4.82% compounded semiannually. Which company offers a higher yield?

2. The figure shows a graph of the future value of $100 at 8% compounded annually, along with the graph of $100 at 8% compounded continuously. Which is which? Explain.

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