1. Analyze and answer the questions regarding the situations below:

A) Mr. Jones says that last year he earned an effective annual rate of 7.00% from making a savings deposit into the local bank, where the money was compounded daily (for 365 days). What was the APR that was being advertised by the bank at the time of the deposit (one year ago?). Provide your answer in decimal terms, not percentage terms).

B) Ms. Smith says that she earned an APY (an annual percentage yield) of 6.28% from a bank that compounded interest every hour for the last 365 days. If this is true, then what APR rate was being advertised by the bank?

C) Miss Molly also invested in the same bank as Ms. Smith (Part B). Miss Molly fancies herself as a big thinker. As such, she likes to think in terms of the effective rate earned per century. She also thinks she is going to live forever, so for her a short term investment is 100 years or more.

Using a discount rate preferred by Miss Molly (in per century terms), determine how much an initial $1000 investment will become after 235 years, and 3 months. Keep your precision very high in this computation. Ignore leap years, and assume that Miss Molly does not pay taxes on earned interest.