1. In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period.

An individual retirement account, or IRA, earns tax-deferred interest and allows the owner to invest up to $5000 each year. Joe and Jill both will make IRA deposits for 30 years (from age 35 to 65) into stock mutual funds yielding 9.7%. Joe deposits $5000 once each year, while Jill has $96.15 (which is 5000/52) withheld from her weekly paycheck and deposited automatically. How much will each have at age 65? (Round your answer to the nearest cent.)

Joe_____

Jill_____

2. In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period.

How much must you invest each month in a mutual fund yielding 11.8% compounded monthly to become a millionaire in 10 years? (Round your answer to the nearest cent.)

3. Find the unpaid balance on the debt. (Round your answer to the nearest cent.)After 7 years of monthly payments on $180,000 at 3% for 25 years.

4. The super prize in a contest is $10 million. This prize will be paid out in equal yearly payments over the next 25 years. If the prize money is guaranteed by AAA bonds yielding 4% and is placed into an escrow account when the contest is announced 1 year before the first payment, how much do the contest sponsors have to deposit in the escrow account? (Round your answer to the nearest cent.)