I second Fermion's words of wisdom. Just to help you a bit, in such problems you will always have 2 out of three parameters(the initial value level, the end of horizon T value level and a capital growth rate or interest rate) and a compounding condition. Compounding is the process where accrued interest is capitalised and next periods' interest is estimated upon this amount too. The frequency this process is iterated is expressed in the compounding condition. It can be annual semi-annual, quarterly, monthly, weekly, daily even continuous In the later the compounding process is iterated every nanosecond virtually.The higher the compounding frequency, the lower the interest rate. Morever this difference is more pronounced for longer investment horizons.For better digesting of the above solve the problem below:1) You are offered to buy today for $95 a bond that pays back to you $100 in a year. Whats the rate of return for your investment of $95 (yield to maturity) if the compounding is: a)annual, b)quarterly, c) monthly and d) continuous?