1. You deposit $2000, $3000, and $4000 respectively at the end of years 1,2, and 3 from today in a mutual fund providing 10% return. Draw a timeline and compute how much your savings will be worth in 3 years.

2. Patricia starts college in 5 years for which she will need $15,000 payable at the end of each of the 4 years. Suppose she can buy an annuity in 5 yrs. that will enable her to make the four $15,000 annual payments. Draw a timeline for all cash flows. What will be the cost of the annuity 5 years from today? What is the most she should be willing to pay for it if purchased today? Assume an interest (discount) rate of 6% during these 9 years.