Tolerance: Be careful with rounding and do not round until you arrive at the final answer. Answer tolerance is 1 at the last digit based on the decimal place accuracy required by that question. For example, if a question asks you to round to the nearest cent (two decimal places) and the correct is $1,235.06, answers within 0.01 ($1,235.05 to $1,235.07) will count as correct. As another example, if a question asks you to round a percent answer to one decimal place and the correct answer is 4.6%, answers within 0.1% (4.5% to 4.7%) will count as correct.

5 and 6

Suppose you deposited $2,000 in a savings account earning 3.6% interest compounding daily. How long will it take for the balance to grow to $8,000? Answer in years rounded to one decimal place. (e.g., 2.4315 years --> 2.4)

If the applicable discount rate is 2.6%, what is the present value of the following stream of cash flows? Assume that the cash flows occur at the end of the year. Round to the nearest dollar.

Cash Flow Year 1: $3,000 Cash Flow Year 2: $4,000 Cash Flow Year 3: $9,000