For dollar amounts, give your answer to the nearest cent and do not include any currency signs. For interest rates, give our answer as a percentage rounded to 2 decimal places and do not include a percentage sign. For example, if you get an answer of 1.234567%, you would enter 1.23 as your response.

For each question, some parts of the question may use values from earlier parts. In these cases, use the EXACT values from the earlier parts, not the rounded values.

For example, if you do the calculation in part a) and you get an answer of exactly $23.456, you would enter 23.46 as your response for part a). If part b) requires the answer from part a), then you would use 23.456 and not the rounded value.

Question 3

Gillian has entered the agreement with Geoffrey described above. She estimates that the costs of the delivery services she has promised to Geoffrey (petrol, insurance, wear and tear, etc) amount to $1012.0202983169 per month in advance for the coming 5 years.

(a) If Gillian can borrow/invest money at a rate of 4% p.a. effective, what is the equivalent amount today of her future liabilities? Note that this calculation should not involve the payment she receives from Geoffrey today.

(b) The money she receives from Geoffrey can be considered a loan, with repayments being the value of the services she provides in return. What is the interest rate, expressed as an effective annual rate, she is being charged on this "loan"?