****P1) Your hometown has

****P1) Your hometown has

****P1) Your hometown has been given $1,000,000 from the estate of a citizen. The gift stipulates themoney cannot be used for five full years but must be invested. If the money is invested at 6.7% annual interest,how much will be available in 5 years if it is compounded annually? How much will be available if it iscompounded semi-annually (2x per year)?P2) Your parents have agreed to lend you $30,000 to help with your college expenses. They do notexpect you to repay the loan or any interest until you have finished school (5 years) and worked for 10 years.At the end of 15 years, they will require $60,000.(a) What is the equivalent interest rate they are charging you? (That is, if this were a standard loan,what would be the interest rate if the value today it $30K and the value in 15 years is $60K?)(b) If your parents are not able to give you a loan, and you take out a private loan for $30,000 at 6.6%annual interest, what would be the equivalent lump-sum payment at the end of 15 years?

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