Suppose that a woman deposits $10,000 into an investment fund that guarantees to pay 3.0% interest every 6 months. that is, interest is compounded semiannually (i. e., once every 6 months) at a rate of 3.0% each semiannual period. a) what is the nominal annual interest rate? b) what is the effective annual interest rate? c) assuming that no additional deposits or withdrawals are made, use the appropriate compound interest factors to determine how much the fund will be worth: i) after 1 year; ii) after 5 years. d) verify that your answers in parts (b) and (c) are correct by constructing a spreadsheet that shows how the initial deposit will grow over 5 years. at a minimum, your spreadsheet should include a row for each interest period over a 5-year planning horizon and show:  the value of in the investment fund at the start of each interest period  the amount of interest earned each interest period; and  the value of the fund at the end of each interest period

Suppose that a major city’s main thoroughfare, which is also an interstate highway, will be completely closed to traffic for two years, from january 2014 to december 2015, for reconstruction at a cost of $535 million. if the construction company were to keep the highway open for traffic during construction, the highway reconstruction project would take much longer and be more expensive. suppose that construction would take four years if the highway were kept open, at a total cost of $800 million. the state department of transportation had to make its decision in 2014, one year before the start of construction (so that the first payment was one year away). so the department of transportation had the following choices: (i) close the highway during construction, at an annual cost of $267.5 million per year for two years. (ii) keep the highway open during construction, at an annual cost of $200 million per year for four years. now suppose the interest rate is 80%. calculate the present value of the costs incurred under each plan.