1. Future values for various compounding frequencies. Delia Martin has $10,000 that she can deposit in any of three counts for a year period Bank A compounds interest on interest each quarter. All the banks have stated an interest rate of 4 an annual basis, bank B compounds interest twice each year, and bank C compounds What amount would Ms. Martin have at the end of the third year, leaving all interest paid on b. On the basis of your findings in parts a, which bank should Ms. Martin deal with? Why? 2. Future values of annuities. Ramesh Abdul wishes to choose the better of two equally costly cash flow streams: annuity X and annuity Y. X is an annuity due with a cash inflow of $9,000 for each of 6 years. Y is an ordinary annuity with a cash inflow of $10,000 for each of 6 years. Chapter Exercise a deposit, in each bank? Assume that Ramesh can earn 15% on his investments On a purely subjective basis, which annuity do you think is more attractive? Why? b. Find the future value at the end of year 6, FVAb, for both annuity X and annuity Y. Use your finding in part b to indicate which annuity is more attractive. Why? Compare your finding to your subjective response in part a. C