QUESTION $2$

a$)$ If you were to lend $$100$ for three years at $10\%$ per year simple interest, how much interest would you get at the end of the three years?

$(6$ Marks$)$

b$)$ If your credit card company charges a nominal $24\%$ interest on the overdue accounts, compounded daily, what is the effective interest rate? $($Assume $1$ year is $365$ days$).$

$(6$ Marks$)$

c$)$ If a new investment that you could make is expected to return a nominal interest of $40\%,$ compounded continuously, what is the effective interest rate you could earn by this investment?

$(6$ Marks$)$

d$)$ Assume the repair costs for your car, at six months from now, to be $$500,$ and assume the repair costs to increase thereafter by $$50$ every six months, over the next four years. What is the annual repair costs if the interest rate is $12\%,$ compounded monthly?

$(7$ Marks$)$