1. Bill starts a retirement fund at age 21 and plans on depositing equal annual amounts on each birthday, starting at age 21, and ending at age 60. He wants to have $2 million at age 60. John starts his fund on his 30 birthday. He wants to deposit equal annual amounts on each birthday starting on his 30 birthday and ending on his 60 birthday. John wants to have $2 million at age 60.

If the investment funds earn 10% per year, calculate the amounts the Bill and John respectively will have to save each year (rounded to the nearest dollar) to meet their goals. Comment on the difference.

2. A retirement home in Florida costs $200,000 today. Housing prices in Florida are increasing at a rate of 4% per year. Joe wants to buy the home in 8 years when he retires. Joe has $25,000 right now in a savings account paying 8% interest per year. Joe wants to make eight equal annual deposits into the savings account starting today.

How much must each deposit be so Joe will have enough money in his savings account to buy the retirement home when he retires?