jor submissions.

Question $1(2$ points$)$

First Great Bank pays $5\mathrm{.}4$ percent simple interest on its investment accounts. If First Exel

Bank pays interest on its accounts compounded annually, what rate should the bank set if it

wants to match First Great Bank over an investment horizon of $9$ years? $($rounding to $4$

decimal places$)$

Question $2(8$ points$)$

You are saving for the college education of your two children. They are two years apart in

age; one will begin college $15$ years from today and the other will begin $17$ years from today.

You estimate your oldest child's college expenses to be $$80,000$ per year, while the

youngest's college expenses are estimated to be $$90,000$; these expenses are payable at the

beginning of each school year. The appropriate interest rate is $10$ percent. How much money

must you deposit in an account each year to fund your children's education? Your deposits

begin one year from today $($i$.$e$,$ at the end of Year $1).$ You will make your last deposit when

your oldest child enters college. Assume four years of college for each child.