1. You plan to deposit some money in a five-year certificate of deposit (CD) at your bank. The stated interest rate applied to the CD is 10 percent compounded annually . How much should you invest if you want the balance in the CD account to be $9,500 within five years?

2. You deposit $2,000 in a savings account that pays 7 percent compounded annual interest and plan to use it to finish your final year of college. Two years later, you decide to become a ski instructor for the Rocky Mountains rather than go to school, and you close your account. How much money will you receive?

3. Bill plans to contribute a maximum of $2,500 to his individual retirement account (IRA) at the end of each year for the next 20 years. If Bill can earn 11 percent from his contributions, how much will he have by the end of the twentieth year?

4. To complete your final year of business school and then move on to law school, you will need $10,000 per year for 4 years, starting next year (ie you will need to withdraw the first $10,000 one year from today). Your rich uncle offers to send you to school and will deposit enough money in 4 payments of $10,000 each in a bank that pays 6% interest. It will be deposited today.

A. How big should the deposit be?

B. How much will be in your account immediately after making the first withdrawal? After the last shot?