1. Ira Schwab opens up a Schwab IRA and places $ 2,000 in his retirement account at the beginning of each year for 10 years. He believes the account will earn 5 percent interest per year, compounded annually. How much will he have in his retirement account in 10 years?

2. EZ Leifer plans to retire at the age of 65 and believes he will live to be 90. EZ wants to receive an annual retirement payment of $ 50,000 at the beginning of each year. He sets up a retirement account that is estimated to earn 6 percent annually.

a. How much money must EZ have in the account when he reaches 65 years old?

b. EZ is currently 29 years of age. How much must he invest in this account at the end of each year for the next 36 years to have the required amount in his account at age 65?

3. You have been shopping for a new home. You have a choice of financing. You can choose either a $ 200,000 mortgage at 4.75 percent for 30 years, or a $ 200,000 mortgage at 3.5 percent for 15 years.

a. Calculate the monthly payment for both the 30- year and 15- year mortgages.

b. Calculate the amount of interest paid over the life of the loan for both mortgages.

c. What are the pros and cons of each mortgage?

4. Sam is currently 30 years of age. He owns his own business and wants to retire at the age of 60. He has little confidence in the current Social Security system. He wants to retire with an annual income of $ 72,000 a year.

a. If Sam believes he will live to age 90, how much does he have to accumulate by the time he reaches age 60 to receive $ 72,000 at the end of each year for the rest of his life? Sam believes he can earn 8 percent on his money in a stock mutual fund.

b. How much does he have to accumulate if he wants the payment of $ 72,000 at the beginning of each year?

c. What dollar amount of interest will Sam have earned during retirement if he receives his $ 72,000 at the beginning of each year?