${?}^{?}$ Problem $3-1$

Jim makes a deposit of $$12,000$ in a bank account. The deposit is to earn interest compounded annually at the rate of $6$ percent for seven years.

Required:

a$.$ How much will Jim have on deposit at the end of seven years? $($Hint: What is future value?$)$

Note: Do not round intermediate calculations and round your final answer to the nearest whole dollar amount.

b$.$ Assuming the deposit earned a $9$ percent rate of interest compounded quarterly, how much would he have at the end of seven years?

Note: Do not round intermediate calculations and round your final answer to the nearest whole dollar amount.

c$1.$ What is the effective annual yield for alternative $($a$)$ where interest is compounded annually? $($Hint: Consider the future value of each deposit after one year only.$)$

Note: Do not round intermediate calculations and enter your answer as a percent rounded to $2$ decimal places.

c$2.$ What is the effective annual yield for alternative $($b$)$ where interest is compounded quarterly? $($Hint: Consider the future value of each deposit after one year only.$)$

Note: Do not round intermediate calculations and enter your answer as a percent rounded to $2$ decimal places.

c$3.$ Which alternative is better?

$\backslash$table$[[$a$.$ Future value $-$ annual compounding,$$,18,044,],[$b$.$ Future value $-$ quarterly compounding,$$,18,207,],[$c$1.$ Effective annual yield $-$ annual compounding,,$1\mathrm{.}00,\%$