1. Find the compound interest and future value. Round your answers to the nearest cent. Do not round intermediate steps.

Principal	Rate	Compounded	Time
$590	4.15%	Quarterly	2 years

The future value is $ , and the compound interest is $ .

2. Determine which is the better investment:

3.53%

compounded semiannually or

3.34%

compounded quarterly. Round your answers to

2

decimal places.

The 3.53% semiannual investment gives an effective rate of % . The 3.34% quarterly investment gives an effective rate of % . Therefore, the (Choose one) investment is a better investment.

3. In order to pay for college, the parents of a child invest

$20,000

in a bond that pays

5%

interest compounded semiannually. How much money will there be in

20

years? Round your answer to the nearest cent.

In 20 years the bond will be worth $ .