. An investor deposits £10,000 in a bank account that pays simple interest at a rate of 5%. What will the deposit have accumulated to after 3 years? 2. An investor puts £5,000 in a savings account that pays 10% simple interest at the end of each year. Compare how much the investor would have after 6 years if the money was: A. invested for 6 years B. invested for 3 years, then immediately reinvested for a further 3 years. 3. An investment of £1,000 in an account accumulated to £2,500 after 5 years. (i) State the accumulation factor 4(0,5). (ii) (a) Find the simple annual interest rate which would give the accumulation factor in part (1). (b) Find the annual compound interest rate which would give the accumulation factor in part (i). 4. A company is due to receive a payment of £500,000 from a customer in 6 months time. To smooth its cashflows, the company would prefer to receive the payment immediately, and has agreed to transfer its entitlement to this payment to a third party (a discount house) in return for an immediate payment calculated using a rate of commercial discount of 16% per annum (pa). How much will the immediate payment made by the discount house be? 5. (i) Given an investment of €1,000 find the accumulation after 5 years using: (a) simple discount of 8% pa (b) compound discount of 8% pa (c) compound interest of 8% pa. (ii) Given a payment of €2,000 due in 4 years' time, calculate the present value using: (a) simple interest of 3% pa (b) simple discount of 3% pa (c) compound interest of 3% pa. (i) Express 5% pa effective interest as a nominal annual interest rate convertible quarterly. (ii) Find the annual effective interest rate equivalent to a nominal interest rate of 12% pa convertible four-monthly. 7. (i) Express 5% pa effective discount as a nominal annual discount rate convertible quarterly. (ii) Find the annual effective discount rate equivalent to a nominal discount rate of 12% pa convertible four-monthly.