1. Calculate the following unknown quantities. 

(a) i = 0.04, m = 12. Find f.

(b) i = 0.02, m = 4. Find an equivalent annual interest rate.

(c) P = $1500, n = 10, S = $1750, semi-annual compounding. Find f. 

(d) f = 0.025, m = 4. Find the quarterly periodic interest rate.

2.  

(a) A GIC with 5% compounded monthly is locked in for 5 years. If it was purchased for $5000, what is its maturity value?

(b) A 10-year strip bond has a face value of $50,000. The bond has an interest rate of 2.4% compounded semiannually. Find how much this bond was purchased for.

(c) A promissory note was established to pay off a debt of $6500 with interest accumulated at 3% compounded monthly. The note was paid off 2.5 years from today. How much was needed to pay off the note?

3. Two offers to purchase an asset are given below: 

• $2000 today and $8000 in 5 months 

• $6000 in 2 months and $4000 in 4 months 

Find the equivalent economic value of these payment streams with k% compounded monthly to determine which is the better offer